Einträge
EMI does it
Here we go: Premium downloads will be better. Better quality, and DRM-free.
On iTunes, you’ll get two versions. 99 cents and DRM-crippled. And 1,29, DRM-free and better encoding.
Jobs estimates, that half of all iTunes-tracks will be sold. Way to go.
The Bandwith Blob
Most telcos agree: the future of TV isn’t about broadcasting anymore. It’s on demand, IPTV, server based, what ever. The idea of the network as a programming entity will be replaced by networks as a technical layer, where the videos are hosted and delivered, and a social layers, which assists you in choosing programming you want to get.
Sounds godd - but has some ramifications. That’s why Google and cable firms warn of risks from Web TV As Vincent Dureau, Google’s head of TV technology, explained at the Cable Europe Congress 2007: The Web infrastructure, and even Google’s (infrastructure) doesn’t scale. It’s not going to offer the quality of service that consumers expect.
Statements like this have always to be taken with a grain of salt. But to deliver high quality TV content you need either have to wait for multicasting to finally take off (whcih means just broadacsting). Or you need quite some barns full of servers and access to cheap bandwith (The Google Way of life). One nice looking solution might be peer 2 peer networking. Joost is doing a great job here, trying to push p2p from the digital fringe into the consumer mainstream. But mind that: currently, the biggest chunk of all Internet traffic is alreday related to p2p-file transfer.
How can you scale this as an ISP? Only if you own your network from core to edge, from backbone to the last mile. And you will have to host as many peers as possible, so that you can keep as much traffic in your own network. Even than, it’s a rat’s race. As one Cable Operator explained at the Cable Conference: People (Internet service providers) don’t like to talk about (the fact) that just to stand still, they have to invest.
Tom Evslin has a nice post on this. If we all shift to watching TV on the Internet, the total bandwidth (Internet and other) required INTO our homes will decrease and the load on the Internet backbone and the regional distribution portions of the Internet will be – well – interesting. Of course, his calculation is a bit misleading. Most of your home-bandwith of today, used for broadcasting, is one way traffic on a shared medium.
As there’s no such thing as a free lunch: where’s all the bandwith coming from? And who’s going to pay for it? That’s why operators want to build up their walled gardens. And charge everybody else for putting stuff on their networks. Question is: do we really want to upgrade the delivery network monopolies of today into virtual content distribution monopolies, with some wholly owned social networking attached?
Blaming Steve
May you live in interesting times. Naughty Steve tells the pop execes what’s wrong, and some are steaming. The probleme is. Steve Job’s arguments are rather flawless. And his contrarians sometime have to hide their real feelings behind the officialy rigid copororate points of view.
Jobs argument goes like this:
- The iPod plays music. The majors only want them to sell restricted music. They have a rather convincing 70% market share. So Apple offers DRM.
- Consumers don’t like restricted music that much. So they want to rip their CDs (In 2006, under 2 billion DRM-protected songs were sold worldwide by online stores, while over 20 billion songs were sold completely DRM-free and unprotected on CDs by the music companies themselves) and put them on their iPods. So Apples offers MP3.
By popular vote, consumers are filling up their iPods with unrestricted stuff (just 3% of the music listened to on iPods is bought at iTunes). Voilá: Forget about the DRM-thingy as the phantastic lock-in of the Apple iPod customer.
So why is Apple the undisputed leader in music download sales. And making gazillions with their shiny little iPods? Other people are selling downloads, too. As other companies built cutesy music players.
Music has always been a software/hardware business. That’s why Sony still owns a major part of a major label. The old thinking went like this: Own the software (A.K.A. music), push your hardware (your real money maker). Unfortunately, the walls of this fortress made out of love, money and eternal happiness crumbled a couple of years ago. The dematerialization of music (ooops, there goes the CD) lowers the barriers of entry into the music player market. Step into any electronics discounter, and you’ll find USB-sticks with head phones attached. Because technically speaking, all you need for a music player is storage and some cheapo computing power.
But now comes to the tricky part. The user interfaces. Yes, interfaces. Because you need two. One for the player (if it’s not just a sub standard iPod shuffle-like music stick). And one for the PC, which feeds/syncs with your player.
Ever tried Sony Connect? Do you think Windows Media Player is a masterpiece of usability? Here we go. iTunes is far from perfect. But it’s holy trinity of player, PC and managing software seems refined enough to make consumers stay. Of course, the brand isn’t that bad, either.
But is this a lock in? Probably not. Let’s have a look at the German market. The download market leader seems to be Deutsche Telekom’s musicload. Well, tons of tv advertising should have at least some effect. Now let’s look at the portable music player market. In 2006, 22% of all households now do own a portable MP3 player (up from 14% in 2005). High penetration you’ll find in the higher income bracket. Lower income brackets are finally slowly taking on.
This means: the early adopters are in Apple’s core market. The downscaling already starts. And with virtually all mobile handsets becoming equipped with removable storage and MP3 players, the scene will change dramatically anyway (Hello iPhone).
But let’s come back to the Jobesian argumentation. His point is clear and simple: we don’t want or need no steenkin’ DRM. And you guys just think you do. And why is this all coming up? It happened at Midem. Some industry execs couldn’t get stopped talking about DRM. Some people couldn’t get stopped talking about execs talking about DRM.
And with Midem“>The NY Times / Herald Tribune jumping in, the whole thing started to become really public. Because, as stated before: the public doesn’t like DRM either.
Why Steve is the better Bill
The music industry is an entertaining place. As honorary buffoons of the traveling trade show circuit, we were allowed to poke fun at their musty business models (”still trying to protect our flailing horse carriage factories since 1875″). Paint their potential saviours in gruesome colors (”some mobile network providers have higher earnings than the revenues of all you guys combined”). Or tried to scare the #%@! out of them by explaining some tech basics (”in 2010, a top of the line hard disk will be able to contain every piece of music which has ever been recorded - preferably preinstalled”).
It has been fun. But now it’s gone. The industry execs took over. They slaughter their holy cow DRM (well, almost). Make fun of their business models. Come on, it’s just not fair.
But why does this make Steve the better Bill? Read this: Apple - Thoughts on Music. And the we can talk about it a bit more.
PS The music industry is really an entertaining place. But people working in the industry tend to suffer from a very specific occupational hazard. They become a little bit hard of hearing.
TV revolutions
Here we go. The Bill is merging PCs and TVs. Again (remember webTV?). And according to his Davos-speech, it will take just about five years to revolutionize the tube.
Of course, Mr. Bill is right. “I’m stunned how people aren’t seeing that with TV, in five years from now, people will laugh at what we’ve had,” he told business leaders and politicians at the World Economic Forum. Yes. What we‘ve had. Let’s not forget. Microsoft is the leading supplier of IPTV backend software for the leading telcos of the world. So it’s very much likely, that in five years, with Windows Vista being slowly replaced by its successor, Microsofts TV foundation will finally deliver on its promises.
Currently, IPTV isn’t any different from any other broadcasted multichannel tv. Same content, same linear delivery. That’s going to change. Slowly. Because for building huge proprietary interactive applications, you’ll need a huge audience. For building small proprietary interactive applications for micro audiences, you’ll need a huge incentive.
That’s where the blur starts. Huge IPTV deployments currently means a quarter million subcribers. That’s a lot if you have to start from scratch. But essentially equals the online population of Memphis, TN. And if you want to revolutionize a mass medium reaching billions of people all over the world, fueled by a global content industry, revolutionizing Memphis will be an important first step out of several gazillions.
That’s why The Bill is making a switch. To quote Reuters: The rise of high-speed Internet and the popularity of video sites like Google Inc.’s YouTube has already led to a worldwide decline in the number hours spent by young people in front of a TV set. Uhm. Interesting math. But Douglas A. McIntyre is making another point here: Using YouTube is actually a poor example of what is likely to happen. Making money from teenagers lip syncing music or farting in the tub is not likely to supplant content like the Superbowl. Unless, of course, Mr. Gates has odd tastes.
Broadband TV Ã la YouTube and IPTV Ã la Gates aren’t twins, separated after birth. It’s two completely different business models. Merging them will happen as soon as Microsoft publishes its software under a GNU license.
Let’s get back to the revolution. “Certain things like elections or the Olympics really point out how TV is terrible. You have to wait for the guy to talk about the thing you care about or you miss the event and want to go back and see it,” explains the software tycoon. “Internet presentation of these things is vastly superior.”
Yes, tv is (sometimes) terrible. An commented on demand features of live events would definitely be a very nice thing to have. But let’s put it like that. TV content is software, too. PC software and tv software a.k.a. broadcasting content are both increasing return businesses. Both are businesses because of the underlying intellectual property rights. But the major difference is: Windows XP has a life cycle of half a decade, at least. Events like the Olympics are good for month and a half. So a real Microsoft TV would be the only available channel, broadcasting a single event for a couple of years in a row, with monthly updates, thank you.
OK, unfair. Microsoft is in the enabling business. With Office being the premier User Generated Content-production suite. “Because TV is moving into being delivered over the Internet — and some of the big phone companies are building up the infrastructure for that — you’re going to have that experience all together,” sez Bill. Nope (No, he doesn’t have to care, as he’s delivering some building blocks for this infrastructure). But just because SAP data and YouTube-vids are delivered via IP, you will not be able to tune into TheWallStreetJournal.tv.
Being Disruptive
Here we go. At Hubert Burda’s DLD, Nicholas Negroponte is holding up a working model of the 100 Dollar Laptop. My little one is still (sometimes) toying around with her Barbie Laptop (which is a purple piece of plastic litter, disguised as a real computer). It’s disruptive, too. Because it blinks and squeaks all the time. Negroponte’s Kddie-Laptop looks like a hard plastic clam shelled soap dish with pointy ears, crossbred with a silly wind up toy. But if you want to talk disruptive, this thing surely will become so. This is a mean machine. In about a decade, we’re going to see the first real effects all over the world.
The Trojan Boxes
A box is a box is a box. But those console boxes are really mostly trojan horses. With one exception. Let’s start with this one. Nintendo’s Wii is just about playing (and puts the web on your tv; a fascinating retro concept straight from the mid nineties). I’m not a gamer. But the Wii with its funny controller redefined the meaning of jump and run gaming. No hidden agenda here.
With Microsoft and Sony, it’s a bit different. Sony’s Playstation 3 is by definition a trojan horse. It’s a fully fledged Linux home workstation (be afraid, Microsoft, be a teensy-weensy bit afraid), doesn’t contain any root kits (it’s a Linux) and is Sony’s spearhead to make Blue Ray the DVD of the future. A single PS3 contains more computing horsepower than all Apollo missions combined, sucks as much energy as a the fully enlightened Empire State Building, and doubles as a virtual lawn mower (at least, it looks like it should). For Sony, it’s make or break. If the PS3 doesn’t deliver, Sony will commit corporate seppuku and you can scrap up its remains on eBay.
Microsoft’s XBox isn’t that big on hardware. It still could render Toy Story 1 in a single afternoon, alas: no real super computer here. Anyway, Microsoft’s idea of operating system fun has been building up a hodepodge of completely different pieces of software, which just share a crappy user interface. Just look at Windows mobile, which is a s bad as it gets (and look at the iPhone: it’s running OS-X, not some bonsai shaped look-a-like). Compared to the Winmob, the XBox is definitely top notch. And it’s a trojan, too. Yes, MS endorsed the HD DVD. But it’s just an add on. The real BIG THING is IPTV. After all, Microsoft is a major player in IPTV. And selling settop-boxes is usually as promising as selling ice cubes in Antarctica (after all, it’s phantastic promise is: you buy this box, and you’ll be able to watch tv. Duh. ) So here comes the XBox. And here it is in action.
Told you so (almost)
Popkom 2004. And Reuters asked the question: Is the mobile phone the next iPod Killer? Some analysts believe the mobile phone with hard disc capacity could revolutionize the MP3 player market just as the camera phone did for the photography world. “There’s no reason to think we won’t have a five-gigabyte hard drive on the market next year,” said Hubert Gertis, a technology analyst for Berlin-based consultancy gertis.media.
Back then, (Giga)Om Malik begged to differ. I just don’t buy “phone as an IPod Killer†argument. OK. Here are the specs and here’s Apple’s iPod killer in action.
See, told you so. Almost. (And could somebody please delete the last paragraph of this piece?)
Anyway. The iPod killer to be (formerly known as iPhone) is actually a video iPod you can shake and talk to. The first thing I thought: how can they build it? Seems like, designing and manufacturing mobile phones isn’t rocket science anymore. Seems like the hardware part in electronics is already a commodity. So they won’t build it but outsource it (just remembering my crappy Treo: Great UI, sloppy manufacturing. So commodity might be a but harsh).
But why’s everybody crazy about it? It’s not just the touchy-feely haptics and the supermodel looks. How about a sexy user interface. Look at the video, again. Compared to this, any Windows smartphone supersoftware looks like a second runner in yesteryears pug ugly contest (Treos refereed, the Nokia family made up the audience. And of course, Sony Ericsson gets the honorary village idiot award for implementing an email client which makes it utterly impossible to delete any message you receive).
Axel Ehssan Springer
OK, that’s a pretty German thing. Bernt von zur Mühlen asks in the media newsletter Medienbote: Where are the Web 2.0 Portal founders? Meaning: old media has had a tradition of reinventing itself from within. And gives some examples. Like Axel Springer (founder of the German multi billion Euro media empire Axel Springer Verlag). Or Helmut Markwort, reinventing for Burda the weekly news mag sector in Germany. Or Helmut Thoma, building up RTL from a softsex pirate station to Germanies leading tv network. His question: has old media now lost its knack? Instead of buildig up their future from scratch again, they buy their future.
Well, we talked about this one before. Real innovation (as in paradigm shifts) has never been the game for the incumbents. At least not in media. So he’s getting something wrong here. The founders are busily starting up their businesses. And the incumbents are busily picking the raisins. And everything’s just fine.
Bill sez: DRM s*cks
Well, of course he didn’t. But he meant it. Or how would you explain an advice like this, while meeting the politburo of the US blogosphere: People should just buy a CD and rip it. You are legal then. As Techcrunch’s Michael Arrington notes.
Now, what is this all about. DRM is a well loathed acronym of the digital entertainment world. Depending on your point of view, it either stands for Digital Rights Management. Meaning, as a publisher you can remotely control the access to digital data. Or Digital Restriction Management. Meaning, it’s a stupid/devious scheme to extend a business model of the 15th century (Johannes Gutenberg invents European movable type printing, thereby enabling mass media production) into the 21st century, which causes immense collateral damage.
To be honest, I understand both positions. Probably the most important digital media topic right now is the question of the content value chain. It’s a nice thing, that now everybody can get worldwide distribution. It would be even nicer, if this distribution could be monetized. In the current setup, producing user generated content means you become an active member of the attention economy. Attention economy always means, that all your efforts will pay out, if you get enough attention of a player with a more tradtional economic approach. It’s the American Idol model. Lots of people give their heart and soul, accept the possibility of public humiliation, to finally get an intern job at a global whatever conglomerate.
I theory, DRMing digital content would transform an infinitesimaly copyable digital file into ressource of virtual scarcity. Transforming it into a sellable good. Sounds good. Unfortunately, this just theory. In it’s current setup, DRMed content is cumbersome for consumers and adds layers of cost and complexity for copyright owners: choosing a DRM, licensing a DRM, paying for DRM - and paying for 1st level customer support, because the consumer does neither understand the tech nor the legal licensing stuff involved. And it can get worse. Just ask Sony BMG about its brilliant idea to infect consumer computers with black-hat-hacker-style root kits.
Of course, DRM is about Digital Restriction Management. Take a freely accessible set of data. Shrinkwrap it using DRM. And whoosh, you’ve restricted the total accessabiliy, and made those restrictions manageable, too. The concept is of course highly attractive. Let’s say, if you put some sensitive data on an intranet. In mass media, there a two different proponents. Traditional media companies, wanting to protect their traditional business model. And governements from überdemocratic countries like China and Iran. And that’s where the collateral damage starts. Because unfortunately, if you really want to shrinkwrap some media into a closed shop, you have to include pretty much all devices which potentially might be used to play such a file.
Which translates into: for protecting a nice old business model we put everything in place to jumpstart a dystopian surveillance society, modeled after Orwell’s 1984 and the East-German Stasi.
But I think, it really stands for Does it Really Matter. Correct me if I’m wrong. But even in a totally shrinkwrapped media world, you will have to leave some space for consumer produced media. Uncle Umpty will have to be able to make his dreadful birthday movies and post them somewhere in the digital realm. The next Robbie Williams will have to put some first moves and shakes onto a web site of his choice. And let’s not forget consumers. Yes, DRMed music downloads are picking up and the iPod saved the Apple. But the digital format of choice is still yer good olde MP3, no strings attached. When the Bill says: People should just buy a CD and rip it, he’s just stating the obvious. Guess where all the music is coming from, filling all those iPods. And the gazillion other MP3 devices out there in the wild, wild consumer world.
But let’s come back to the digital value chain. Is DRM evil? Nope. But it can be used for mighty evil things. So better be careful of the collateral damage. In its current implementation, DRM ist mostly stupid. Interoperability is a word consumers should not have to learn to hate (as it per se does not exist). DRM can be a nice thing in a confined setup. But it’s not a silver bullet. As a value chain of one chain link is a pretty feeble excuse for not being able to adapt to the brave new world of networked entertainment.