Category Archives: Media

Who Cares If We’re Getting Dumber?

As consumers spend more time with the Internet they are spending less time with books. {Clients can see some recent Jupiter work on media consumption trends here.) Some observers are worried. Motoko Rich had a great piece in the New York Times over the weekend that looked at the impact of online behavior and Web reading habits on reading, thinking and concentration skills and looked at these worries.

“Some scientists worry that the fractured experience typical of the Internet could rob developing readers of crucial skills,” she writes.

Some of the worry is about the impact of Web usage on the brain itself. “Neurological studies show that learning to read changes the brain’s circuitry,” she says. “Scientists speculate that reading on the Internet may also affect the brain’s hard wiring in a way that is different from book reading.”

In duly balanced New York Times fashion, Rich also cites opposing views–that the Web might actually be enriching users’ ability to process information. “Web proponents believe that strong readers on the Web may eventually surpass those who rely on books. Reading five Web sites, an op-ed article and a blog post or two, experts say, can be more enriching than reading one book.

‘It takes a long time to read a 400-page book,’ said Mr. Spiro of Michigan State. ‘In a tenth of the time,’ he said, the Internet allows a reader to ‘cover a lot more of the topic from different points of view.’”

Apart from the intrinsically interesting question of whether Web use is making us dumber, I wondered why people should care, especially if their own kids (like mine) are avid readers of linear paper media. Along with other surprise benefits of the Internet, such as the destruction of popular culture, perhaps the Web creates an opportunity for those of us and our offspring who have retained cognitive skills to out-maneuver the e-nitwits in our competition for the best jobs and richest resources in a dumbed-down world of the future.

Then I read, in today’s Times, David Brook’s column, cites new research on stagnant educational attainment in the United States, saying that as a result the country’s long-term prospects are in jeopardy. But Brooks extends a compelling benefit to those who escape the dumbing down envisioned by e-nitwit hypothesis: In a dumbed-down world, “The relatively few skilled workers command higher prices, while the many unskilled ones have little bargaining power.”

So whether you care about declining educational attainment, or whether surging Internet use is developing or crippling cognitive skills, depends partly on whether you you take a narrow, self-interested perspective, or a broader one, which by necessity must consider the the plight of many of us who depend on rich resources of human capital to run our businesses. What will we do if the wells run dry?

News, Politics & the Internet Panel

There was a lively discussion at the panel this morning on News, Politics & the Internet, hosted by Time Warner at their NYC headquarters in support of Internet Week New York.

On the stage:
- David Bohrman (SVP & Washington Bureau Chief, CNN): Moderator
- Steve Grove (Head of News and Politics, YouTube)
- Nadira Hira (Writer, FORTUNE magazine)
- Michael Scherer (Washington Bureau Correspondent, TIME Magazine)

Steve Grove pointed out that videos posted on YouTube by Obama supporters got far more views than those posted by the candidate’s team; that the enormous popularity of Obama’s now-famous 37-minute speech on race shattered the myth that only short video clips find an audience online. And he suggested that the Obama campaign may have benefited from analyzing the comments that official video posts attracted to shape subsequent speeches.

Nadira Hira showed good humor in accepting the role as interpreter of young folks, and folks of color, for Fortune’s readers, observed that Facebook lit up with conversation during the conclusion of the presidential primary season last night.

Michael Scherer (who also blogs at Time’s Swampland) noted that the Internet is “not a community of activities–it’s a tool that anyone can use” and credited the Obama campaign of appealing early to a “new online populism.” Scherer also echoed Jupiter’s view that news products are being deconstructed, and that news organizations are competing story by story. (A series of research reports by Barry Parr paint the picture, here, here and here. And here’s a recent one on politics specifically.)

Microsoft and the Limits of Scale

Why has Microsoft found it so difficult to fulfill its online ambitions? After all, according to comScore, Microsoft properties attract a vast number of visitors, not too far behind Google properties (in the US, 121M vs. 137M). With such a gigantic audience, all that would seem to be missing in its competition with Google is a competitive search experience. Doesn’t it seem that Microsoft would have as good a shot as any company to field a competitive experience, considering the vastness of its resources compared to Google:

Over 4 times as many employees
Over 5 times as many employees in R&D
Over 3 times as much R&D spending
Nearly $12 billion in cash on hand as of March 31 (a hair less than Google’s cash on hand).

All of this is surely enough to neutralize scale economies as barrier to entry, as I wrote about yesterday.

But those vast resources are spread across multiple Microsoft businesses. And Microsoft’s Online Services Business is losing a billion dollars a year. Meanwhile, the company cannot afford to neglect its cash cow and other emerging businesses either. So focus is one advantage that Google has. Another would have to be incumbency, Porter’s #5 mentioned in yesterday’s post. No matter how many resources you throw at competing with Google, you can hope–for but not count on–matching or exceeding the technological breakthroughs that have given them this lead.

Acquiring to Change the Playing Field

Microsoft seems to have reached this conclusion, leading them to make an aggressive acquisition bid that they hoped would allow them to reap further scale benefits and enhance their competitive position not so much in search but in the portal and display advertising business. That logic still applies. The question is whether Microsoft will turn its attention to acquiring some other online player with a similar rationale.

Hence today’s reports that Microsoft has been in talks with Facebook.

Revealed: Why Everything Is Getting So Cruddy

Did you ever stop to wonder why everything is getting so cruddy? Look at the experiences that have been transformed by digital technology in the last 10 years and you will find experiences that have been diminished—at least according to the criteria traditionally used to assess those experiences.

Take telephony. Reliability used to be the touchstone of the phone system. It was the telecom guys who invented the notion of “five nines” reliability. Ma Bell’s network was rock solid. Today, the phone systems that most people use, much of the time, are laughably unreliable, and of lower audio quality too. People have come to expect spotty cell phone coverage, dropped calls and background noise. The strange digital effects introduced in VoIP telephony are increasingly in evidence as people trade traditional phone service for cheaper, more flexible alternatives.

Or take recorded music. Recorded music technology used to be judged by one criterion above all: fidelity. (Hence the term hi-fi.) But in the move from vinyl to CD to MP3, sound quality has been sacrificed in favor of a variety of other benefits, including the fact that digital recordings can often be obtained for free, and MP3 players can be worn as jewelry. (An article in the NYT discusses this phenomenon.) Much as audio purists maintain that vinyl records produce richer, realer sound than digital alternatives, some even maintain that tube amplifiers produce better sound than those built from transistors. But those purists are increasingly seen as irrelevant–by the makers of audio equipment and by the music industry too.

The Web gave rise to the “thin client,” with its user experience that was positively impoverished compared to the “thick client” experience made popular by rich, client-based software interacting with one or more server tiers on the back end. While browser-based applications offer much better experiences today than their forebears 5 years ago, even then, the browser set off a mad dash to replace rich, high-quality user experiences with thin, cruddy browser-based ones, because thin-client economics were better.

The Web has also created serious competition in the media industry, nowhere more evident than in the news and information sector. Here, digital technology offers quick, free, real-time but often sloppy, ugly and inaccurate alternatives to traditional media, where accuracy and transparency used to rank high among the values. And the junk has found a huge audience, and its influence is so powerful that the traditional media is a work copying its tactics and co-opting its ethos.

What is going on here? It’s not that everything is going to hell in a hand basket. (Or not just that.) It’s that in all of these areas—and others—digital technology has allowed a rebalancing of tradeoffs. Quality, reliability, accuracy–meet ubiquity, scalability, extreme convenience, democratization, openness and personalization. Masses of consumers mobilized at a speed never seen in the pre-digital era, are demonstrating that they expect a new system of values and tradeoffs expressed in their products, services and experiences.

Some of the examples I’ve cited above bring to mind Clayton Christensen’s influential book “The Innovator’s Dilemma,” which documented how disruptive technologies often appear inferior to the incumbent technologies they ultimately come to supplant. That is because often “products that do not appear to be useful to our customers today … may squarely address their needs tomorrow.”

But it feels like more is going on here. It feels like the very definitions of “useful” and “needs” are up for grabs in ways that the creators of the earlier generations of consumer services and technologies could not have anticipated.

Where will this all lead? I’m not sure yet. But we’ll be talking about it in the halls of JupiterResearch. And we’ll be happy to talk to you about it too.

What Are Black People Searching For?

RushmoreDrive, IAC’s new site aimed at “the Black community” purports to know better than Google other search engines. And it aims to deliver to advertisers an audience with some compelling attributes.

African-Americans make up just over 11 percent of the online population, according to our freshly updated US online population model, but a recent JupiterResearch report indicates that they exhibit some desirable behaviors online. (IAC will be going after other segments with other specialty sites, according to the WSJ.)

I’ve seen a number of (mixed) assessments of the quality of RushmoreDrive’s search results. And a few musings about whether this is good or bad for society. (Jeff Jarvis, for example, asks some questions about online racial segregation.)

I haven’t come across anything so far, though, on how the behavior of online African Americans might affect the economics of this venture. Jupiter’s most recent analysis of the behavior and attitudes of online African-Americans suggests that they have some characteristics that should interest prospective RushmoreDrive advertisers. In a nutshell, African-Americans appear to be more responsive than Caucasians to online advertising and more credulous of online sources of information.

Specifically, our consumer survey found that African-Americans were more likely than Caucasians to

  • visit Web sites related to ads after viewing online advertising.
  • enter sweepstakes
  • play online games
  • sign up for e-mail newsletters
  • forward ads to friends

    On the other hand, African-Americans are less likely than are Caucasians to

  • read news online
  • research products and services online

    Those who do research products for purchase, though, are more likely to trust content they find in online forums, blogs and advertisements.

    Jupiter’s said for a while that with the growth of the online population slowing, marketers will need to embrace a variety of tactics to better target the customer segments they seek. RushmoreDrive is offering to help them do that. Way too early to tell what impact it will have, however.

  • Books Rule

    Some say people don’t read books anymore. A number of folks are describing, envisioning or proselytizing a future in which books may become obsolete (given the dynamic and socially constructed nature of knowledge). If you want to be taken seriously, though, you’ll say those things in a book. Like one of these: Free 1, Free 2, Miscellaneous, Swell, Convergence. Not to mention, no one knows yet how to preserve digital information for hundreds of years.

    Books rule.

    Got Your Converter Box Coupon?

    I do not enjoy a reputation for being an early adopter, but I nonetheless have just received my TV converter box “coupons” (actually plastic cards, emblazoned with holograms, that look like payment cards, some digits erased to protect myself):

    Converter Card.JPG

    If you haven’t already requested one, you can do so here.

    Give it to someone who gets TV over the air and doesn’t plan to buy a digital TV receiver in the next year. Mom?

    Giant Particle Accelerator Produces Post-Modern Front-Page Story

    A story on the front page of the New York Times this weekend about the “Large Hadron Collider” begins:

    More fighting in Iraq. Somalia in chaos. People in this country can’t afford their mortgages and in some places now they can’t even afford rice.

    None of this nor the rest of the grimness on the front page today will matter a bit, though, if two men pursuing a lawsuit in federal court in Hawaii turn out to be right. They think a giant particle accelerator that will begin smashing protons together outside Geneva this summer might produce a black hole or something else that will spell the end of the Earth — and maybe the universe.

    When was the last time you saw a front-page story reference four other stories with which it shared the front page that day? A cool, creepy effect. Nothing like the risks feared by critics of the super-collider, which include

    … chances that the collider could produce, among other horrors, a tiny black hole, which, they say, could eat the Earth. Or it could spit out something called a “strangelet” that would convert our planet to a shrunken dense dead lump of something called “strange matter.”

    Interesting reading. The editorial effect of the opening will be lost on readers of the Web edition, though.

    “Apple Has Destroyed the Music Business”

    … said Jeff Zucker today at an event organized by the Newhouse School of Public Communications.

    “If we don’t take controle on the video side, they’ll do the same” to video.

    Zucker made the comment in response to a question by moderator Ken Auletta of the New Yorker. (Auletta did a fabulous job of volleying one penetrating question after another at Zucker.)

    Zucker put in context the highly publicized conflict between NBC Universal and Apple over pricing on the iTunes TV show store. NBC sought to introduce flexible pricing; Apple refused.

    Zucker said NBC wanted to take any single one of its shows–and would even allow Steve Jobs to pick the show–to experiment with variable pricing on iTunes. In the near term, it wasn’t about money, suggested Zucker, who said NBC Universal earned $15 million dollars through iTunes sales. It was about being able to experiment.

    Update (and I’ve heard from readers about this): It wasn’t just about experimenting on the price points for digital downloads. NBC was also asking for a cut of Apple’s iPod sales, at least at some point in the negotiations. Zucker himself said so.

    “Nobody has figured out the economic model on the digital side,” Zucker said.

    I had the opportunity to ask him how NBC Universal was navigating this uncertainty. These times call for experimentation, he said. Thus NBC’s multiprong Internet video distribution strategy, with the support of NBC’s branded destinations like nbc.com as well as “superstores” like the just-launched hulu.com, for example. [See David Card's brief initial thoughts on Hulu.] And Zucker’s insistance on variable pricing.

    Even today, even to Zucker (and I’ve said so myself), figuring out Internet video is all about experimentation. Companies who allow themselves to be locked into a business model too soon may put themselves at a disdvantage as the contours of the internet video future begin to emerge.

    My Presentation on Broadband Video at VON Israel

    I just returned from a quick but intense trip to Israel to meet with a number of Jupiter’s major clients and prospective clients there and to speak at the VON conference. Here’s my keynote (in English) on Broadband Video.

    More on the trip in another post.