Posts Tagged ‘web 2.0’

Anderson downgrades Long Tail to Chocolate Teapot status

Friday, November 21st, 2008

Long Tail

“The end came quickly,” as authors of morbid weepies like to say. On Monday WiReD magazine editor Chris Anderson effectively admitted game over for his “Long Tail”, the idea he’s been dragging so lucratively around the conference circuit for the past four years. In as many words, he downgraded it from “the future of business” to something that’s, er, not very helpful for your business at all.

“I’ll end by conceding a point: It’s hard to make money in the Tail,” Anderson wrote. “The revenues are disproportionately in the Head. Perhaps that will never change.”

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The BBC's Tragic Twitterers

Thursday, November 13th, 2008

Rory Celland Jones

Here’s a conundrum. Top Media People want to come out of the shadows and get “closer to their listeners” – it’s what the Web 2.0 people urge them to do. BBC people in particular are obsessed with being seen to be bossy or “out-of-touch” – especially since three out of four license payers have a gripe with the corporation.

But the more of themselves media people reveal, the more the public sees them as clueless, self-referential and narcissistic bunch so many of them are. And the more time the BBC spends on peripheral New Media wankery, the more people wonder why they’re paying a license fee. You’d need a heart of silicon not to enjoy their agony. The poor souls.

At Monday’s “Radio At The Edge” forum at Westminster a panel of three: presenter Iain Lee, a Nathan Barley-type from Channel 4 called Dan Heft, and the BBC’s website’s tech blogger Rory Cellan Jones – better known as ‘Uncle Bryn’ in the hit comedy show Gavin and Stacey – all came to praise the glory of Twittering, Googling 24×7, and user generated content.

The audience was packed with BBC New Media employees – masters of JavaScript, and people who can say “social media” without blushing. So it all promised to be a swoon – with ritual noises of self-abasement from the broadcasters.

But what spoiled this was the panel’s chair, Fi Glover, who could barely contain her sarcasm or her scorn for the “Emperor’s New Clothes”, as she called it a few times.

Uncle Bryn took to the stage and spent the first minute taking pictures of the other panelists – and the audience – using his Blackberry. Asked what he was doing, he said he was trying to Twitter live that he was Twittering live from a panel about Twitter.

Over to Dan Heft, who reminded us that “you leave a trail of digital content out there”, but Bryn’s own trail had come to a halt – he couldn’t get his Twitter feed to work.

“I haven’t done any work – I’ve been blogging,” Bryn admitted, adding that he’d been “doing a helluva lot of Twittering”, too.

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The Long Tail can seriously damage your business

Friday, November 7th, 2008

The most comprehensive empirical study of digital music sales ever conducted has some bad news for Californian technology utopians. Since 2004, WiReD magazine editor Chris Anderson has been hawking his “Long Tail” proposition around the world: blockbusters will matter less, and businesses will “sell less of more”. The graph has become iconic – a kind of ‘Hockey Stick’ for Web 2.0 – with the author applying his message to many different business sectors. Alas, following the WiReD Way of Business as a matter of faith could be catastrophic for your business and investment decisions.

Long Tail
Anderson bet that the orange portion – the “Tail” – has more value than the red portion – the “Head”. But it doesn’t.

Examining tens of millions of transactions from a large digital music provider, economist Will Page with Mblox founder Andrew Bud and Page’s colleague Gary Eggleton, looked to see how large and valuable the “Tail” of digital music may be. They produced a spreadsheet with 1.5 million rows – so large, in fact, that it required a special upgrade to their Excel software (and more RAM) – and the three revealed their work at the Telco 2.0 conference this week.

They discovered that instead of following a Pareto or “power law” curve, as Anderson suggested, digital song sales follow a classic Log Normal distribution. 80 per cent of the digital inventory sold no copies at all – and the ‘head’ was far more concentrated than the economists expected.

“Is the ‘future of business’ really selling more of less?” asks Page. “Absolutely not. If you had Top of the Pops now, you’d feature the Top 14, not Top 40.”

As Andrew Bud explains:

“The Long Tail’s argument is that the pattern of consumption for media is bent out of shape by the limits of the shops selling them. Digital media lets the nature of people’s demand flow free. Well, we now know what the shape of that demand curve looks like.”

Bud told the conference that the basic shape of consumer demand for digital music clearly fits the Log Normal distribution, “with eye-watering accuracy”. That’s no surprise, he says, because so many sales curves he’s seen over the past ten years follow this distribution.

“Now we’ve seen what happens when tens of millions of choices are thrown in the air and people can go pick them up. What was astounding was the degree of inequality between the head and the tail – by a factor of three. It’s specifically the Log Normal shape that leads to a rather poverty stricken Tail.

“There are Tails where the Tail lives as a kind of welfare state. Not this one. You starve in this Tail.”

Digital sales follow a Log Normal distribution
Brown’s 1956 lognormal curve fits digital sales data much better than “The Long Tail”

This really isn’t the upbeat fairy tale message Anderson has spent four years selling on the conference circuit.

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One billion unwanted opinions in real-time: Now SHOUTED at you

Wednesday, October 22nd, 2008

Hats off to young British entrepreneur Chris Ridgeon for developing a new tool for self-expression. Internetshout.com which launches today describes itself as “the world’s voice-based social and discussion forum” – and delivers exactly what it promises on the tin.

Instead of simply spraying your thoughts onto the Hive Mind’s graffiti wall using ASCII, you can now speak your brains at the internet, instead. Or if you prefer, SHOUT YOUR BRAINS at it.

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EMI hires the Biggest Brain in Sadville

Monday, June 9th, 2008

How desperate is EMI? Desperate enough to hire the co-founder of Sadville? Amazingly, yes. Not only is a graphics programmer joining the storied British music group as head of “digital strategy” – he cheerfully admits he doesn’t know anything about the music business. And he doesn’t even like music – he’s only bought five albums in the past eight years and three of those are by Rush.

Welcome to EMI, then, Linden Labs co-founder Cory Ondrejka.
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Failing Web 2.0 stars pray for copyright abolition

Tuesday, May 27th, 2008

Web 2.0

Two articles were published today of some note, and if you can put them in context, you can begin see the true, scary picture of internet economics today. The one that’s usually too scary for the posh papers or broadcast media to describe.

Exhibit One is a deadpan report in the Financial Times, bylined to Chris Nuttall and Richard Waters. It’s titled, “Web 2.0 fails to produce cash“.

This could be the least-surprising headline of this (or any) year. Dog Bites Man rarely makes the news. As we predicted years ago, Web 2.0 was only ever a rhetorical bubble, designed to boost a clutch of no-hope investments into the arms of an acquirer. For a handful of others – mostly pundits – it was a lifeline from a dead-end media job into gurudom. It didn’t take a genius to work that out.

(We also despaired that Web 2.0 failed to address any of the significant technical challenges of the day. Which, alas, has proved true – even after VCs have spunked $1.5bn of cash at the Javascript kiddies, we’re no nearer to solving these problems. That’s because Web 2.0 was “interface” level people trying to solve “infrastructure” level problems – which is a bit like supposing that a talent for painting garden gnomes qualifies you for designing skyscrapers that don’t fall over.)

Nuttall and Waters point out that now the VC money is drying up, investors can see that there’s precious little to show for Web 2.0 in terms of sustainable businesses.

A good example is YouTube. Acquiring the site cost Google $1.7bn, but even with a “global” audience and Google’s best brains now piloting the operation, it only earned $31m last year. Even bullish analysts (Bear Stearns) don’t expect this to get beyond $90m this year, and around $165 in 2012. Page rates, which the industry measures in CPMs (cost per thousand), will barely eke above $5. Someway short of hopeful, recent estimates.

So where do Web 2.0 companies go from this vale of tears, this endless sea of red ink, populated by the pastel-coloured rounded rectangles of sinking startups?

Exhibit Two gives us a clue.

We’re broke. Can you help us?

It’s a post by Gertrude Stein-lookalike Michael Arrington, an investor who hypes companies he invests in. And who recently suckered the Washington Post into reprinting his nepotistic little tip-sheet, Tech Crunch. Arrington’s advice?

“It’s time to rethink copyright laws, and it’s time for copyright holders to rethink their business models…

“The winners … [will] be the companies that throw out everything that’s come before, and build new businesses around the natural behavior of people.”

All of which is like telling successful passenger liner operators to get more “Titanic-like”. But Arrington does us a great service, albeit unwittingly.

He’s reminding us that what great internet audiences flock to is copyright material. A web that consists only of User Generated Content might be fun for a while, and even illuminating in places, since “amateurs” are doing much of the work that lazy professionals cannot, or dare not do. But with no income coming in, most will eventually cease to do it. One can only remain a sucker for so long.

And so what Arrington, and other sock puppets for the giant internet companies crave, is really quite simple. They want to the lower the cost of their raw material – preferably to zero.

That’s in keeping with the recent call by anti-copyright activists to be paid for P2P file sharing: in other words, the copyright holders should pay them. But Arrington is a “freetard” through necessity, not by ideological choice.

Having succeeded in using “people power” to get innocents to contribute labour for nothing, the Web 2.0 deperados now need copyright holders to follow suit.

And they’ve been pretty successful at it, too. Newspapers are acting like lemmings, in the hope that the “future value” of the web will save the physical businesses they’re helping destroy. But it’s asking a lot for people to give up a modestly successful business model, for one that’s already, demonstrably broken.

The truth is that outside certain lucrative niches, it’s impossible to monetize the web from general purpose content. It’s a telephone network – with pictures – and the most people will pay for a telephone network (even with pictures) is a buck or two a month.

As it happens, I’m in favour of copyright reform too – but it’s predicated on gathering more money for creators, not propping up serial business failures like … Michael Arrington. So the next time you hear the ritualistic whining about the trouble copyright holders cause plucky internet startups, remember who really needs who.

With exquisite timing, a book that should serve as a tombstone for Web 2.0 plopped out recently. It’s called Once You’re Lucky – Twice You’re Good: The Rebirth of Silicon Valley and the Rise of Web 2.0.

I’m going to snap up a couple as novelty gifts – and one for myself. It’ll go next to my treasured Pets.com puppet.

Technorati knocks itself out. Again

Sunday, May 25th, 2008

Technorati, the comically inept search engine, has redesigned itself again – knocking itself out in the process.

The site was down when bloggers checked in yesterday.

More importantly, the latest redesign is a tacit admission that it’s given up on its original mission – indexing the world’s weblogs. Technorati now claims to present “zillions of photos, videos, blogs and more”, and rather apologetically adds the rejoinder: “Some of them have to be good.

No. Why?

In practice, Technorati now returns only a tiny number of blogs – and prefers to offer thumbnails of digital images already tagged with a keyword. A technical challenge that does not exactly require the algorithmic prowess of a Donald Knuth.

Technorati, the comically inept search engine, has redesigned itself again – knocking itself out in the process.

The site was down when bloggers checked in yesterday.

More importantly, the latest redesign is a tacit admission that it’s given up on its original mission – indexing the world’s weblogs. Technorati now claims to present “zillions of photos, videos, blogs and more”, and rather apologetically adds the rejoinder: “Some of them have to be good.”

No. Why?

In practice, Technorati now returns only a tiny number of blogs – and prefers to offer thumbnails of digital images already tagged with a keyword. A technical challenge that does not exactly require the algorithmic prowess of a Donald Knuth.

So what was always a lousy blog search tool is now little more than a lousy image search tool – this is not going to worry Yahoo! or Google.

Call it a strategic retreat. The site has fought heroically to stem the Rise of the Machines, exemplified by tools like this, but lost. Who would have guessed?

Well, not the journalist pals of founder Dave Sifry, and A-list bloggers who gave Technorati oodles of back-scratching press when it launched in 2003. Hacks were as keen as Sifry to evangelise blogging, and instantly conferred guru status on him; here was a man with the numbers that mattered! Reports were invariably too kind to mention that Technorati rarely worked well, and often didn’t work at all.

The moral of the story is hard to miss. Maybe ideological evangelism and engineering don’t really mix. Evangelism and honest reporting certainly don’t.

"Wake up and smell the Doritos™" – Terry McBride

Thursday, May 15th, 2008

Copyright is over, and musicians should make themselves as pretty as they can for big brand advertisers, says top music manager and label boss Terry McBride.

McBride’s Nettwerk Music manages artists including Avril Lavigne and the Barenaked Ladies, and it’s been an indie label for over 20 years. He’s put his thoughts into a Music Tank report published today, and a keynote at Brighton’s Great Escape music festival.

It’s an upbeat vision of the future that eulogises free music, mash-ups and corporate sponsorship. It’s just not a vision of the future everyone is going to welcome – for example, Billy Bragg, who warned against corporate-flavoured feudalism here recently.

Last night Terry was named Music Manager of the Year by his peers. So we caught up with him today ahead of the keynote, to find out where the RIAA scourge thinks the money’s going to come from.

In the report, entitled “Meet The Millenials“, McBride writes –

“Discovery of new music in the digital economy will be synonymous with consumption”. The money will come from ad-supported music services and subscriptions.”

He predicts:

“Premium data services will be the new format of chic within social connections of friends and like-minded individuals”.

“Price will be a fluid definition and more indicative of a response to demand and freedom to use the file after purchase. The definition of what is ‘free’ and what is ‘paid’ will merge, and become a relative point of view.”

That’s one to remember when your landlord knocks on the door, demanding the rent.

“You might think I’m two months behind,” you’ll be able to say, “But that’s a relative point of view.”

Actually free music will become “an upsell technique for other music related products, e.g. concert tickets, clothing, music or artist branded physical products,” reckons McBride. The recorded music helps establish a larger commercial presence. And don’t forget micro-monetisation of P2P recommendations, he writes.

So let’s hear it from the horses mouth. Show us the money, Terry!

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The New Statesman's NuLab IT Awards

Tuesday, May 13th, 2008

Although the New Statesman magazine’s annual New Media Awards (NMA) don’t quite match up to the EFF’s annual Nepotism Award – nothing quite does – they’re still a rich source of humour and embarrassment.

Getting an NMA is the equivalent of getting an orange at half time from the coach of your village football team, just for turning up in the rain. But this year, even by its own standards, New Statesman appears to have outsourced the nominations to a team of satirical writers.

What else can explain one nominee, East Devon District Council, which is lauded for “using AJAX web technology” to “provide efficiencies in waste collections”.

Rubbish enabling rubbish, if you like.

But Garbage 2.0 faces a tough challenge from another nominee, Jimmy Leach, “head of digital communications” at 10 Downing Street.

“Since he started in his post at Downing Street,” we learn, “Jimmy Leach has transformed the government’s approach to new media”.

That’s remarkably similar to the boilerplate text Number 10 sends out to accompany Jimmy Leach’s forays into the real world:

“Since he started in his post at Downing Street, Jimmy Leach has transformed the government’s approach to new media,” apparently.

How? Well, “he executed the e-petitions strategy which has resulted in many millions of people engaging with the website. He has also instituted a series of podcasts featuring the PM and personalities such as Eddie Izzard, Stephen Fry, Chris Evans, Bill Bryson and more”.

Your taxes at work, there.

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Futurist's music widget goes titsup 2.0

Tuesday, April 22nd, 2008

Music’s best-known “futurist” has admitted his latest business idea has flopped and the service will close. Gerd Leonard of “Music 2.0″ fame, who popularised the phrase “music flows like water”, has discovered that on the internet, revenue flows like set cement.

His company Sonific, which allows bloggers to embed a widget that plays music, will suspend its service on May 1. The founder blamed “lack of solid revenue modelling”

(Translation 2.0: no income).
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