Entertainment/music dollars – more destinations, same amount of cash.

Lots of thought has gone into why music sales are declining with piracy always pointed to as the likely culprit. Some say music today is not as good as yesterday’s music which seems like a weak argument. However, one thing that I have been thinking about is that the buying public has a finite amount of “entertainment dollars”. However, the number of things you can spend your entertainment dollars on keeps increasing. For example in the 80s most people did not pay for cable TV, now they do. Similarly, in the early 90s most people did not pay for mobile phones, now they do. I am sure there are more examples but essentially if the entertainment dollar game is a zero-sum game (inflation not included) then it makes a certain amount of sense that people have less dollars available for music. This is analogous to the attention economy but applied to dollars. The difference is that attention scarcity can be improved by applying filtering to prevent information overload. However, music overload is not the problem that is effecting music sales i.e. I don’t think people are having a hard time finding music they like. One solution might be to somehow derive more revenue from other sources that fight for your entertainment dollar eg via mobile phone services like ringtones. But that is just the start and I think the content folks need to create an environment where the music can flow and developers can build new services quickly. In other words, create a platform and harness a thousand coding monkeys & websites to deliver new and innovative flow/services.

I am guessing this is what MTV is trying to do with their assets as pointed out in this excellent post by Robert Young. They are trying to put themselves at the vortex of the dissemination of their assets allowing them to monetize the flow instead of youtube. I could be wrong about this. Be interesting to see.

I am sure others have thought through this already so ignore if this is redundant.

DRM is so yesterday. Fingerprinting to the rescue (or not).

There is an article in today’s NYT talking about fingerprinting technology. Fingerprinting technology basically automates the identification of a piece media. The article describes how myspace is using the technology to filter the video and audio that is uploaded, thus helping myspace to steer clear of infringing on the rights of the media owners.

So one way to view this is another technology that is helping to thwart piracy, the next logical step after DRM. However, I don’t think much will be accomplished by fingerprinting or DRM. People need to figure out how to use the viral nature of the internet to their advantage instead of trying to build fences around everything. Fred Wilson calls his solution microchunking and I think he is on to something. In addition, I believe that the disseminated content will drive consumers to that media property if properly executed e.g. watching Jon Stewart on youtube will drive people to watch Jon Stewart on TV, kids hearing songs on each other’s myspace pages will drive them to spend money on the actual music and concert tickets. I believe technologies like DRM and fingerprinting actually inhibit the monetization of content.

Another interesting side-note is that there is supposedly more investment in fingerprinting technology now. Well, I don’t think the DRM infrastructure industry is raking it on DRM technology and solutions. If you view this from the consumers side, this makes sense. Why would anyone pay more for DRM’d content? So if they are not paying more for it but someone else must profit from the sale of the content then the profits are being split among a greater number of people. And guess what, since the DRM companies are the latest to join the party they get the crumbs. I am guessing the same will try for the fingerprinting industry.

Update:  And then in a bit of cosmic timing Fred posts an example of why he likes youtube.  The video of Springsteen is so great and makes me want to listen to more of his music.  And this type of content would rarely if ever make it to TV.  It is unique to the web.  And it is user generated.  And…  Oh well you get the point.

Michael Gartenberg becomes a Microsoft evangelist

Michael Gartenberg has left Jupiter and joined Microsoft as an evangelist.  I think he was a good analyst and enjoyed his blog so I am sorry that he will not continue in that capacity.  Will he be a good evangelist for Microsoft?  Time will tell.  Hopefully he talked to Scoble before he took the job so he knows what he is getting into.  If nothing else it will be interesting and I wish him well.

Viaduct or tunnel: TUNNEL!

OK, I should state up front that I don’t know all the facts on the pros and cons of this one, so the argument is more of a gut thing than a rational argument.  So here goes.

Seattle’s waterfront has a long viaduct running along the length of the waterfront. The viaduct is ugly and not safe. It thus needs to be replaced. For the last couple of years the politicians here have been debating whether to replace the viaduct with a new viaduct or a tunnel. I don’t know why we would consider a new viaduct. The waterfront is really not very nice right now because of the viaduct and that would not change with a new viaduct (slight improvement but still a large blocking structure right on the waterfront). There are amazing views of Puget Sound and the Olympic Mountains that are currently blocked. It could be just an amazing place. Seattle’s location on Puget Sound makes it a stunning downtown location.

So I don’t know all the details but it seems obvious to me that the tunnel should be the preferred choice. I lived in San Francisco when they tore down the Embarcadero freeway/viaduct after the Loma Prieta earthquake (was there for that too). In that case they did not replace the freeway with anything but just went put in a surface street. However, it changed that part of the waterfront for the better in a big way.

Yes, the construction will be painful but it will yeild a new and beautiful part of Seattle. I also think public transportation should be a huge part of the answer. Add a light rail that runs along the length of the tunnel. It could move a lot of people and cut down on car use. For that matter add really nice bike lanes. People here like to bike but we need to add more bike lanes to promote biking.

Here is a link to the mayor’s site that has some data.

My vote:  tunnel + public transportation + bike lanes.  And a beautiful waterfront for Seattle and all the tourists.

Chauffeuring teenagers – DRM is too complicated

So one of the most interesting parts of parenting teenagers is driving them around. I try to mostly just shut up and listen to them talk. Educational and hilarious both.

Anyway, yesterday I gave my son and a friend of his a ride and the subject of music came up. A discussion ensued that made it quite clear that the rules that DRM try to enforce make zero sense to this audience. They are not really interested in finding out the background either. Basically, only people in the music industry can really fathom the technology and the rules associated with different DRM solutions. And that is really the problem. It is a problem that plagues consumer offerings in general: overestimating the audience and its sophistication. The PC and CE industry persist in making things that are too hard to use. One thing you have to give Apple credit for is making iTunes/iPod somehow manageable for the unwashed masses. I still think it is too hard to use which actually is an opportunity for someone else to do something cooler and simpler.

DRM – Microsoft hedges its bets

So Microsoft announced that they have new and shiny DRM tools for mobile phones and O2, Telefonica, at&t & Bouguyes lined up support. New features:

• supports non-MS codec like AAC, H.264
• supports other types of content like games & pictures

This is interesting from a number of angles:

• recent debate about DRM after Steve Jobs’ post about DRM
• Microsoft offering tools to the mobile industry independent of the Windows Mobile. Music playback is becoming a checklist feature for most mobile phones and their numbers dward total iPod shipments any day.
• Zune – what if it fails and/or perhaps music on mobiles become a bigger thing

Net-net it keeps Microsoft in the game and this is an interesting bet that music and other content on mobiles will become even bigger than it already is. Pretty significant operator support as well which likely means that these operators will support this technology.

The challenge as with all things DRM is making the DRM invisible. That is something that Jobs brought up but that I don’t think is really possible unless a standard emerges and everyone uses it. Unfortunately, I don’t think this will happen and even if it did, making it completely transparent to consumers is even more daunting.

Update – Randomly rebooting Macbook Pro

I have to apologize to the Flock folks. I have stayed away from using Flock but my random restarts persist. So Flock had nothing to do with it. So much for that theory.

Oh, I forgot, Macs never crash. It must all be a recurring hallucination. Argh….

STP – Seattle to Portland

I am going to participate in STP with my son and his friend. It’s a 200 mile bike “race” in July. So I have to work myself up from 50 miles a week to 200 miles in a weekend by July. I am pretending it should be fun. Greg is my inspiration. He did this. Some day I would like to do this in the old country but I have not skied cross-country since I was a kid. It really was a hell of a lot of fun though. Growing up in northern Sweden was heavenly. Not much light in the winter but lots of snow and the forest in my backyard.

Microsoft is bad; Apple is good

Om posts about Microsoft’s upcoming Zune phone (which is a rumor) and how Microsoft will surely screw its partners again. This post is not a defense of Microsoft but Om’s flogging of Microsoft gets a bit old after a while and seems naive. In this case it seems particularly goofy because the product in question is still only a rumor. Perhaps Om would like to check in with Adobe, Avid, Digidesign, Musicmatch and Dave Winer about their experience with Apple as partners. Hmm…