BorisChernin.com

Why Myspace is Broken, and How to Fix It

2010-02-08T17:18:00.001-08:00

Rupert Murdoch is not a happy camper. Myspace is hemorrhaging money, and no one can seem to stop the bleeding. Adotas reports that Myspace has lost News Corp around $32 million in the fourth quarter of 2009; about $73 million total for 2009. This decline can largely be attributed to decreases in search and advertising revenues based on consistently falling traffic.

The fundamental problem with post-Fox Myspace is that they simply focused on finding ways to monetize and exploit the site's users, instead of trying to maintain a user-centric social experience. The site became rife with shady marketers, promoters, spammers and obtrusive ads… sparking a mass exodus of users, whom Facebook was only too happy to accommodate.

Myspace also suffered from many maladies that made the user experience simply too difficult to bear in the face of up-and-coming Facebook. Myspace users complained about the site's poor usability, frequent errors and confusing pages and layouts. Where customization was at first novel and interesting, it had become unwieldy, sometimes downright ugly, and too focused on individual personalization rather than creating and sharing with a community. So many "users" were marketers, and their comments and posts so self-involved and non-reciprocatory that there was just no incentive for anyone to participate anymore. Ads were everywhere; a large number of personal messages received were spam and even many profiles were simply ads. The average, everyday user found the balance of usability and community they were looking for on Facebook, who offered a simple and clean interface where everything was easily shared and commented on.

So what now? Can this once dominant space be salvaged AND made to turn a profit? While Myspace is no longer the platform of choice for users to connect with family and friends, it still attracts around 50 million unique visitors per month, (even though that number has fallen around 20% in the past six months), and so it is still a viable destination site.

Here is my 4-point plan to fix Myspace:

Completely shift the focus of the site and redesign the user experience.
Why does the user have to be fluent in HTML to personalize their profile or post pictures or video on Myspace? The beauty of Facebook is that all of the code is under the surface, and the user never has to futz around with it. A click or two, and every picture, video and comment is just as it was meant to be. Though the platform does allow for huge personalization using HTML code, it seems that this has fallen in priority of desirable features – with ease of use taking the top spot.
Mobilize the user base to actively create content, rather than just update their statuses.
The creation of user-generated content pages on an infinite number of topics would enrich the content library, and drive user engagement. The idea is to create a platform that would empower and re-energize the once-passionate Myspace community to participate in a forum that isn't self-centered or a shameless marketing ploy.
Shift the revenue model from display advertising to behaviorally targeted ads, as well as demographic and psychographic data collection and analysis.
Visitors know that ads are inescapable – a way of life in today's internet; but the ads don't need to be intrusive, and if done correctly, can actually enhance the community experience by serving as targeted, relevant advertainment. Visiting a Muse fan page to read reviews of their new album? A clearly labeled side bar will offer you a clip from their new video and tell you that they just announced new concert dates near you. Don't make people search for it, serve it right up! Such ads are proven to increase conversion rates and would be more attractive to higher-value advertisers, as opposed to the "Get Ripped in 4 Weeks" and "Who's got a crush on you?" crowd Myspace is currently in business with.
Foster and publicize innovation.
In its heyday, Myspace was constantly adding features and updates to the site… and telling people about it! What Myspacer doesn't remember the steady stream of messages from Tom talking about what was constantly being done to further the user experience? Stop focusing on turning a profit, and start focusing on developing functions and features that will make people want to use Myspace again.

Video Game DLC = Serious Marketing Opportunities

2009-09-18T13:25:00.000-07:00

As Downloadable Content (DLC) for video games becomes more popular and robust, customizable DLC has begun to really help brands differentiate platforms and distribution channels.

Publishers have long been using DLC to extend the cycle of their products, and create additional revenue streams, (such as purchasable song downloads for Guitar Hero or Rock Band games). But recently DLC has created opportunities in other sides of the gaming business, like platforms and retailers.

For example, the recently released Warner Bros. "Batman: Arkham Asylum" is a widely distributed title for both PS3 and Xbox 360, however only the PS3 version allows gamers to play as The Joker. But it doesn't stop at simply character exclusivity. GTA IV players on XBOX 360 can download DLC that is practically a whole new game called "The Ballad of Gay Tony", which Rockstar is not making available for PS3.

Such DLC customization has recently moved from simple platform competition to retail distribution differentiation. Buying "Shaun White Snowboarding" from Target will get you a unique course called "Target Mountain"; GameStop delivers a whole new Palazzo Medici level for the highly-anticipated upcoming release "Assasin's Creed 2".

As Josh Lovison noted today in a MediaPost commentary, two very interesting issues that surface here are: 1) the ability to shift purchase behavior through DLC offerings; and 2) creating a motivated, highly-targeted, opt-in audience of consumers eager to open themselves to ad targeting in exchange for the value-add of DLC.

Ad integration in gaming has recently come under fire because of it's perceived intrusiveness into the gaming experience. But smart, relevant ads and brand communications can enhance the gaming experience, as has been shown by EA in almost all of their sports series, (Madden NFL, NBA Live, Nascar, etc.). Granted, the audience for the sports games are used to sponsorship in telecasts, and therefore its existence in games actually adds realism. Factor in the opt-in nature of DLC, and you have another powerful brand marketing tool that creates access to a highly-coveted and targeted demographic.

The Madden Curse continues!

2009-09-11T02:16:00.001-07:00

Through 1999, John Madden appeared on every cover of the EA football video game franchise. In 2000, EA decided to feature athletes on the covers, who then all seemed to have problematic seasons - giving rise to the famous “Madden Curse”.

Don’t believe in curses? Here are the facts, judge for yourself.

2000: Barry Sanders

John Madden reprises his role on the cover, with Barry as a background image. Barry promptly retires for no good reason right before the season he was probably going to break Walter Payton’s then-all-time rushing record. Thanks, John!

Barry Sanders	1995	1996	1997	1998	1999
Games:	16	16	16	16	N/A
Rushing Yards:	1,500	1,553	2,053	1,491	N/A
Rushing Avg:	4.8	5.1	6.1	4.3	N/A
Receiving Yards:	398	147	305	289	N/A
Touchdowns:	12	11	14	4	N/A

2001: Eddie George

Eddie had his worst statistical season up to that point. Previously never having less than 1300 rushing yards, he finished with 939 and 5 TDs, (11 less than the previous season!). The Titans finished 7-9 and failed to make the playoffs. Worst of all, George couldn't handle a pass at the of the last game, resulting in a Ray Lewis touchdown that effectively ended the Titan’s season. Let’s not forget the Titans were in the Super Bowl the year before. George retired 3 years later at an early age from the wear and tear on his body.

Eddie George 1997 1998 1999 2000 2001 2002 2003
Games: 16 16 16 16 16 16 16
Rushing Yards: 1,399 1,294 1,304 1,509 939 1,165 1,031
Rushing Avg: 3.9 3.7 4.1 3.7 3.0 3.4 3.3
Receiving Yards: 44 310 458 453 279 255 163
Total Touchdowns: 7 6 13 16 5 14 5

2002: Daunte Culpepper

Fresh Ground Culpepper suffered a severe decline in his output (14 TDs, 13 INTs) from the previous season (33 TDs, 16 INTs). He also suffered a serious injury that made him miss 5 games, giving the Vikings one of their worst seasons in nearly 20 years. After two awful knee injuries and a short-lived retirement, he is now the back-up QB for the Detroit Lions - who last year became the only team in history to win ZERO games!

Daunte Culpepper	2000	2001	2002	2003	2004	2005	2006
Games:	16	11	16	14	16	7	4
Passing Yards:	3,937	2,612	3,853	3,479	4,717	1,564	929
Interceptions:	16	13	23	11	11	12	3
Total Touchdowns:	40	19	28	29	41	7	3
QB Rating:	98.0	83.3	75.3	96.4	110.9	72.0	77.0

2003: Marshall Faulk

Marshall Marshall Marshall had one of the worst statistical seasons of his career (topped 1000 yards in 7 of previous 8 seasons with over 1300 in each of last 4 seasons), and a nagging ankle injuring plagued him all season. His TD total (10) was less than half of his previous season’s (21). He never seemed to be able to get healthy after this year and never cracked the 1000 yard mark EVER AGAIN in his career. Injuries forced him into retirement.

Marshall Faulk	1999	2000	2001	2002	2003	2004	2005
Games:	16	14	14	14	11	14	16
Rushing Yards:	1,381	1,359	1,382	953	818	774	292
Rushing Avg:	5.5	5.4	5.3	4.5	3.9	4.0	4.5
Receiving Yards:	1,048	830	765	537	290	310	291
Total Touchdowns:	12	26	21	10	11	4	1

2004: Michael Vick

The Michael Vick Experience broke his leg during a pre-season game before the real season even started, and missed most it as a result. The previous year he had the best statistical season of his career (3700 combined yards and 24 TDs). Vick never again even came close to those numbers, and a couple of years later he was found guilty of “masterminding” a dog-fighting ring and sentenced to 23 months in prison. Upon his release he was signed by the Philadelphia Eagles, and is currently Donovan McNabb's (future Madden victim) backup.

Michael Vick	2001	2002	2003	2004	2005	2006	2007
Games:	8	15	5	15	15	16	0
Passing Yards:	785	2,936	585	2,313	2,412	2,474	J
Interceptions:	3	8	3	12	13	13	A
Total Touchdowns:	3	16	4	15	19	15	I
QB Rating:	62.7	81.6	69.0	78.1	73.1	75.7	L

2005: Ray Lewis

OK, so Ray-Ray might be the “exception” - relatively speaking. He only missed 1 game to injury, but suffered a decline in the amount of tackles and turnovers from his previous seasons. He also failed to intercept a pass for the first time in his career. However, he did manage to avoid murder and aggravated assault charges by pleading guilty to a misdemeanor and snitching on his co-defendants, so I guess we chalk this one up as a win.

Ray Lewis	2001	2002	2003	2004	2005	2006	2007
Games:	16	5	16	15	4	14	14
Total Tackles:	162	58	163	147	46	103	121
Sacks:	3.5	0.0	1.5	1.0	1.0	5.0	2.0
Interceptions:	3	2	6	0	1	2	2
Def. Touchdowns:	0	0	1	0	0	0	1

2006: Donovan McNabb

Let’s just recall that Donovan’s previous season was a career year for him (over 4000 combined yards and 34 TDs) and the Eagles made it to the Super Bowl. That being said, after appearing on the Madden cover, Rush Limbaugh’s favorite QB suffered a sports hernia early on and threw 9 picks in the 9 games he played, (he threw 8 INTs the entire previous season). Tough guy that he is, he tried to play through it, but that mercifully ended when the Dallas Cowboys knocked him out of the game in week 10 and he decided to have surgery to repair the hernia. The Eagles - Super Bowl contenders the previous year - finished 5-11. Oh, and let’s not forget that circus feud with T.O.

Donovan McNabb	2001	2002	2003	2004	2005	2006	2007
Games:	16	10	16	15	9	10	14
Passing Yards:	3,233	2,289	3,216	3,875	2,507	2,647	3,324
Interceptions:	12	6	11	8	9	6	7
Total Touchdowns:	27	23	19	34	17	21	19
QB Rating:	84.3	86.0	79.6	104.7	85	95.5	89.9

2007: Shaun Alexander

The previous year, SALEX had MVP stats - over 1800 rushing yards and a then NFL record 27 TDs. Played every game. In fact, he had over 1200 yards in each of the previous 5 seasons with never less than 14 TDs. After the cover? Missed 5 games with a broken foot, scored 7 TDs and didn’t crack 900 yards. Didn’t crack 800 yards the following year. Currently not on any NFL roster. Ouch!

Shaun Alexander	2001	2002	2003	2004	2005	2006	2007
Games:	16	16	16	16	16	10	13
Rushing Yards:	1,318	1,175	1,435	1,696	1,880	896	716
Avg Per Carry:	4.3	4.0	4.4	4.8	5.1	3.6	3.5
Total Touchdowns:	16	18	16	20	28	7	5

2008: Vince Young

Though the former NCAA national champion and Rose Bowl MVP did not have a good rookie season, (2200 passing yards, 12 TDs, 13 INTs), his second NFL season was even worse. Though the Madden cover-boy stayed relatively healthy, he threw 9 TDs and 17 (!!!) interceptions. He ended up ranking 27^th in TDs (there are only 32 teams in the NFL) and tied for 7^th with legendary pick machine Kurt Warner in INTs. Then Vince went crazy. He went AWOL from the team, talked about killing himself and/or retiring from football, and generally scared the hell out of his agent. Once it was impressed upon him just how much money was in question here, he came back to the Titans and is now the backup QB.

Vince Young	2004	2005	2006	2007	2008
Games:	College	at UT	15	15	3
Passing Yards:	-	-	2,546	2,199	219
Interceptions:	-	-	17	13	2
Total Touchdowns:	-	-	19	12	1
QB Rating:	-	-	66.7	71.1	64.5

2009: Brett Favre

Dude played 16 legendary years in Green Bay and was the face of the franchise for every one of them. People in Wisconsin named their kids and pets after him. So he gets tapped for the Madden cover and promptly retires. Then he un-retires, causing a media circus. Then he gets traded to one of the New York Jets - one of worst teams in the AFC. Brett plays half the season with a torn bicep, which the Jets front office conveniently leaves off the injury report and throws for as many interceptions as touchdowns, (22), and a dismal 61 QB rating over his last five games. After the 2009 season, Brett retired... again. Since it was a slow sporting news summer, rumors swirl about yet another return - this time with the Minnesota Vikings. Brett responds that he will stay retired. Two weeks before the beginning of the 2010 season, Brett Favre was announced as the starting quarterback for the Vikings. People in Green Bay are throwing themselves out of windows as we speak.

Brett Favre	2002	2003	2004	2005	2006	2007	2008
Games:	16	16	16	16	16	16	16
Passing Yards:	3,658	3,361	4,088	3,881	3,885	4,155	3,472
Interceptions:	16	21	17	29	18	15	22
Total Touchdowns:	27	32	30	20	19	28	22
QB Rating:	85.6	90.4	92.4	70.9	72.7	95.7	81.0

2010: Troy Polamalu

This year, the Madden team at EA decided to hedge their bets and have two players on the cover - one defensive and one offensive. The duo they chose both played in the the previous Super Bowl: wide receiver Larry Fitzgerald and safety Troy Polamalu. Both these guys are young and the best players at their position in the league. What could go wrong? Well, I'm glad you asked! First game of the 2010 season against Tennessee, Polamalu looked every bit the perennial pro-bowler; flying all over the field, stopping runs, batting passes and coming up with one of the greatest one-handed interceptions ever. Then he sprained his MCL trying to recover a blocked field goal attempt. No word yet on Troy's timetable for return... but usually that kind of injury takes at least 3-6 weeks. At the time of writing, Fitzgerald has not yet played his first game of the season. I hope he has insurance.

The curse lives on!

Playboy's new print business model: charging more for less

2009-05-11T23:07:00.000-07:00

So today Playboy Enterprises reported a $13.7 million dollar loss for the first quarter of 2009. CEO Jerome Kern, on an earnings call, reported that revenues actually fell by $17 million, but they were able to offset some of this by cutting a quarter of its workforce, closing its DVD business unit and merging its publishing and online New York offices and moving to Chicago.

The revenue decline was in every business unit across the board, and according to Folio, Kern has a creative new strategy to turn the ship around: charge more for fewer issues of Playboy magazine! The publisher says that they are going to combine monthly issues to produce fewer per year, starting with July and August of this year, and increase their cover and subscription prices.

With more and more advertising dollars moving online, print advertising is reaching a crisis point. Playboy says they expect to report a second quarter 39% decrease in ad sales revenue from the same period in 2008. And yet, Kern says, print is still a "key focus of attention" for the company, though with "radical changes".

It's tough to see what kind of "radical changes" Playboy can institute into their print business that could stop the bleeding. Print still represents more than half of the company's revenue stream, but the writing is on the wall: print is a dying medium. Playboy may be better served focusing on their online offering. Though also experiencing heavy losses, (falling 40% from same time last year), a rethinking of their format, content and revenue model could poise the the company to take advantage of the advertising dollars that are currently flowing into online, and will continue to do so during our economic recovery - which is hopefully imminent!

Did I mention that Playboy reported a year-end net loss of $156.2 million for 2008? If Playboy doesn't do something, the viability of the company as a stand-alone business is going to be in jeopardy, (Kern has already said they would be "open to discussion" regarding the sale of the company). Hef might even have to cut a couple of his girlfriends and slash his Viagra budget.

"24" jumps the shark...again, and completely sells out in the process!

2009-03-30T23:36:00.000-07:00

I used to love the show "24". I loved Jack Bauer, Tony, Chloe, and the rest of the CTU gang. But in the last few seasons the show has definitely gone downhill. It is generally accepted that the show officially "jumped the shark" in Season 2 when Kim Bauer had her famous encounter with a mountain lion. But many people feel that the show has repeatedly jumped the shark in every episode since! The stories are ridiculous, the dialogue laughable and the acting strained and amateur. Yes, I still watch it.

"24" has long supplemented its broadcast commercial revenue with product placement. GM cars, Dell computers and Sprint-Nextel phones were prominently featured in many scenes. These placements seemed fairly natural.. unobtrusive at the very least. They didn't impact the story, and they actually lent themselves to the progression of the plot. But now, the producers of the show have gone too far.

In the 3-30-09 episode, a character is offering to help the government find WMDs in return for a presidential pardon, brokered by the FBI. The FBI agent in charge calls the president and offers the deal, which the president accepts. The problem is the scene is so contrived, the dialogue so blatantly unnatural... here is the offending line From the FBI agent:

"We've already drafted an executive pardon,(dramatic pause), and set it up via WebEx. You'll be able to give a secure digital signature and we're good to go."

This line is accompanied by a screenshot of Cisco's WebEx online conference and meeting service. The president then proceeds into the next room, stands in front of a Dell computer with a Logitech webcam, and signs a pad with a stylus. The camera cuts to a view of the computer monitor, with a screen shot of a video conference and the signed document, with a Cisco WebEx logo in the bottom corner. Then, the camera actually cut-zooms onto the Webex logo! It literally takes up about 1/15th of the screen!

Never have I seen product placement so rampantly intrude on a scene. They actually wrote that line - possibly the whole scene - just to be able to integrate the WebEx product! I feel dirty for watching it. For shame, "24"! You can inundate us with all the out-of-context ads you want, but when you start compromising the entertainment value of the program to accommodate sponsor tie-ins, that value is reduced... in my eyes, tremendously. The more you sell, the less you have left to sell, my friends.

I will no longer be a party to this, and I advise all those that read this to follow my lead. Good bye, Jack. You should have died in China.

The Non-Market Issues, Interests, Information, Institutions and Strategies Pertaining to The Pirate Bay Trial (the basics)

2009-03-15T19:17:00.001-07:00

The entertainment industry is an overarching term for the business of entertainment. It consists of a large number of sub-industries devoted to entertaining customers, ranging from traditional live entertainment, (such as a circus, ballet or play), to present-day mass media, (film, broadcast radio and television, music industry), video and electronic gaming. Worldwide, the entertainment industry employs hundreds of thousands of people and generates trillions of dollars in revenue, worldwide.

The entertainment industry basically sells the manifestation of talent and intellectual property for public consumption. At their core, entertainment companies’ ability to generate revenue is tied directly to their ability to control the distribution of said intellectual property. Central to the sustainability of the entertainment industry, as a whole, is the protection of their talent and intellectual property from unauthorized reproduction and distribution. Infringement on these intellectual property rights – whether real or perceived – is a substantial threat to the industry in terms of lost income and property/brand devaluation.
Copyright/IP infringement has always been a major issue and topic of concern for the entertainment industry. Seeing the obvious need to protect intellectual properties, most countries have some form of IP protection/anti-piracy laws in place. However, with recent advances in technology, combating IP infringement and piracy is becoming increasingly difficult, as technology can sometimes blur the line between what is and is not actually piracy and infringement. Since technology advances extremely quickly, it is very difficult for most countries to keep their IP protection laws up-to-date to include the latest methods and tools of infringement, as most legal processes are relatively slow-moving.

The interests on this issue are numerous. Foremost among these are the producers and distributors of entertainment properties. These include film studios and distributors, music labels, television networks, production companies, video game publishers, software programmers, artists, musicians, actors, writers and directors. But there are also many ancillary businesses that have an interest in the proper distribution of IP. Retail home entertainment distributors, movie theaters, commercial radio stations, and media and platform manufacturers… basically anyone who makes money from the sale of entertainment products. The list is simply too long to continue here.

On the other side of the issue are consumers, who benefit from lower costs of the entertainment products produced and distributed by the entertainment industry. These interests are served by “pirates”, or people who duplicate and distribute protected IP unlawfully and outside of the intended usage of the producer – typically at a substantially lower cost to the consumer. While such cut-and-dry activities are clearly theft, and illegal almost everywhere, new advancements in digital technology has raised significant questions about what is considered infringement and piracy, and what exactly are the rights of the purchaser of media.

New digital peer-to-peer file sharing platforms – known as bit torrents - facilitate the exchange of digital media files directly between multiple users without any intermediary servers. This allows companies such as The Pirate Bay, the largest ad-supported torrent search site, to serve as a directory for peers to find and exchange music, movies, video games, computer programs, and other digital media. There are hundreds of similar sites, including torrent aggregators such as SumoTorrent, Torrentz and Mininova. They generate revenue by monetizing traffic to their websites – in search of free peer-shared media – with ad serving.
Of course the representatives of the entertainment industry contend that the users of these sites directly infringe on copyrights, and that the torrent sites should be held liable for such infringement. The major point of contention here is the tracking of user information, including lists of connected systems and the files exchanged, which was the information used to deem file-sharing precursor Napster liable for copyright violation in 2001, (A&M Records, Inc. v. Napster, Inc.). It is this user information that has become central in assessing the liability of the torrent sites, and why most of the torrent sites in question do not maintain this information. This lack of record keeping makes it much more difficult for the entertainment industry representatives and counsel to actually find and track peer exchanges and possible copyright and IP violations.

Another piece of information vital in assessing the legality of peer-to-peer sharing is the statement of rights of entertainment consumers. The industry has clearly set rules for the distribution and sharing of legally purchased media content, such as DVDs and music albums. These rules expressly forbid any additional distribution or exhibition, (without prior permission of the producers or rights holders). However, these rules have never been seriously tested for legality, and it is unknown at this time just how far these rules extend, and how they can be enforced.

To combat peer-to-peer sharing, the entertainment industry has launched publicity campaigns in the numerous media outlets promoting the idea that “sharing is stealing”, and that it is only fair that the producers of entertainment be fairly compensated for their hard work. The contrary view is that the prices for entertainment are disproportionately and artificially inflated, and that the producers are greedy and don’t deserve the exorbitant compensation they are perceived to already receive.

Additionally, many of the large media companies like Universal Pictures, Sony BMG and Time Warner have begun collecting their own file sharing user data, and use this data to prosecute perceived infringements in federal and state courts. This has met with some modicum of success, but the sheer scale of peer-to-peer file sharing is such that these prosecutions are simply drops in the much larger bucket, and most file sharers don’t feel that the threat of litigation is significant, and therefore it is not a great deterrent to the activity.

These same media companies have also been lobbying governments in the major media consuming countries worldwide to adopt more stringent laws governing this activity. So far, these efforts have not generated any significant legislation. However, on noteworthy result of the pressure and lobbying exerted by these entertainment companies is the recent trial of The Pirate Bay in Sweden.

In May of 2006, Stockholm police raided the offices of The Pirate Bay, seizing company documents and computer servers. Pirate Bay management claims that the raid was a result of lobbying and pressure on the Swedish government by the Motion Picture Association of America (MPAA), a powerful industry advocacy group. Based on the information seized from the highly publicized raid, and the consequent immediate shut-down of The Pirate Bay website, the MPAA regarded the action to be highly successful. However, the website was back on line three days later with web traffic more than double the web traffic. With file-sharing now very visible in the Swedish media and worldwide, and more and more people heading to The Pirate Bay and similar torrent trackers, it is difficult to share the MPAA’s view of the matter. While there has been fairly low coverage of this issue in the traditional print and broadcast media, internet-based media and specialty print periodicals has covered the issue fairly widely, because of the importance and appeal of the issue to their audiences.

On January 31, 2008 Swedish prosecutors filed charges against four of the individuals behind The Pirate Bay for "promoting other people's infringements of copyright laws" . The charges were supported by a consortium of IP copyright holders led by the International Federation of the Phonographic Industry (IFPI) – the organization that represents the interests of the recording industry worldwide. They also filed individual compensation claims against the owners and proprietors of The Pirate Bay: Fredrik Neij, Gottfrid Svartholm, Peter Sunde and Carl Lundstrom. The trial began on February 16, 2009 in the district court of Stockholm, Sweden, and the hearings concluded on March 3 with the verdict – rendered by a judge and three appointed “laymen” - scheduled to be announced on Friday 17 April. If found guilty, the defendants could be fined up to $188,000 USD and sentenced to up to two years in prison. A damages claim of approximately $13 million USD has also been filed. The result of this trial will clearly have enormous repercussions throughout the entertainment industry, both on the production and consumer sides.
The question here is not whether or not there is copyright violation going on here, but where the responsibility lies for copyright infringement through file-sharing: with the service provider, or with the internet users who trade files in violation of copyright laws.

Currently this issue is in the enforcement stage of the nonmarket issue lifecycle. Rules governing IP rights have been clearly established, and this trial uniquely both enforcement of the status quo, and a challenge to it. If the trial verdict is in favor of the entertainment industry, the status quo is likely to be left unchanged, and the issue will remain in the enforcement stage. However, if The Pirate Bay should win the case, the issue will likely revert back to the legislation stage, not only in Sweden but in many other countries, who will continue to be pressured by industry coalitions to change the law to reflect the results of this case, and create tighter regulations for IP control. It should be noted that tighter control of media could create unforeseen consequences, such as stunting technological development or restricting legal, non-infringing peer-to-peer file sharing.

Since the status quo already includes laws for IP protection, the alternative would be even tighter constrictions on IP distribution and restriction on peer-to-peer file sharing. The benefits of the alternative are tightly concentrated, in terms of the entities that stand to benefit from it; entertainment and media producers and distributors. Those employed by these companies and businesses related to the entertainment industry stand to benefit as well. By sheer number of people, the benefits would seem to be widely distributed, as these companies employ over a million people.

Conversely, the harms stemming from tighter control of IP and restrictions on file sharing seem - at first glance – to be fairly concentrated to simply users who currently use file sharing to infringe on copyrighted materials. However, the full potential of peer-to-peer data and file sharing has not been realized yet, and it is possible that hampering its development could potentially harm many other people who do not currently use the service, but may do so in the future if it is developed and robust enough. Also, tightening control would continue the entertainment oligopoly that is the entertainment industry today, with 3-5 major companies owning a large chunk of the content, and artificially inflating the prices of it, even as costs go down significantly… as was the case with CD albums in the late 1990’s and early 2000’s. As such, millions of people could be potentially adversely affected by tighter control.

The most potent political strategy for those interests in favor of changing the status quo and instituting tighter control would be majority building – continuing to target political office holders and policy makers and lobbying them to push for additional laws that would provide tighter control. This would be best done in a low-profile manner, through closed meeting and campaign contributions, as many of these companies are already publicly perceived as somewhat greedy, their public PR campaigns for “fairness” notwithstanding.

I believe that the Swedish government’s intervention and prosecution of The Pirate Bay’s file sharing facilitation would be considered justified by just about any economist; Chicago, Berkeley and anyone in between, because the main rational for the intervention is the protection of tangible property rights – one of the primary reasons that governments exist in the first place. If the outcome of the case is in the favor of the entertainment industry, the government has done its job and protected their IP rights. If it goes against them, the government of Sweden is clearly stating the limitations of the laws protecting these property rights. Either way, the intervening action of the trial is clearly warranted.

UPDATE: Twitter going mainstream

2009-03-03T17:25:00.000-08:00

Earlier today I wrote briefly about brands using Twitter to market themselves. So now I read in a MediaPost article that Skittles.com has changed its website. Normally, this would not be a hugely significant event... but their brand website is a Facbook page with a Twitter feed! I'm serious!

Read the whole MediaPost article here, but here is the most earthshaking part of it for me:
"Here's the message Skittles is sending: What consumers say about the brand is more important than what the brand has to say to consumers." WOW!

Granted, not a lot of people go to Skittles.com - less than 20k per month according to Compete - and they will probably be able to reach a lot more through Facebook and Twitter... but putting your brand image and message fully in the hands of social networks? Risky!

POSTSCRIPT: Two days after I originally wrote this blog, Skittles was forced to take down their Twitter feed because of an avalanche obscenities being Tweeted about Skittles and winding up on their homepage. This was not a deficult thing to predict when you look at who Skittles' customers are: kids! Kids think its funny to see bad words in print and do lots of bad stuff on the internet that their parents do not monitor.

The lessons? (with apologies to Jim Stearne at WAA)
* Understand your customer.
* Understand your brand.
* Share control.
* Be part of the conversation, don't just give it away to others.

What happens when Twitter goes mainstream?

2009-03-03T10:10:00.000-08:00

For those of you who are brand new to the "interweb", welcome! Those of you who have been around for a bit have almost certainly heard of Twitter. Launched in July 2006, Twitter is a social networking and micro-blogging service that allows users to post their latest updates. An update (known as a "tweet")is limited by 140 characters and can be posted through three methods: web form, text message, or instant message.

The start-up that defined the term has simply exploded in popularity over the last year. The growth numbers are staggering! After starting 2008 with only around 500,000 unique monthly visitors, Twitter saw its most dramatic growth in the second half of the year, picking up more than one million (34.7%) additional visitors (U.S.) in December alone, (this Dec. spike due largely to the company's increased exposure from the presidential election, where President Obama used the service during his campaign and there was running tweet commentary the night of election by many high profile people). Here's the chart from Compete.com:

The audience grew 813% in one year, to total 6 million unique visitors in a month... and they have no revenue model... no way to monetize this traffic! Rumors have been swirling for months in the blogoshpere about how Twitter is going to make money, with ideas ranging from in-stream & SMS advertising to membership fees. But founder Biz Stone has made it clear through his own blogs and - of course - tweets, that these options are not currently on the table.

The upshot of such a huge growth in web traffic is that it creates a network effect for its users. The more people use Twitter, the greater the abundance of information and opinions that can be shared, the more value it creates to every use. And businesses are taking notice.

Companies like Dell and Volkswagen already have Twitter groups and dedicated Twitterers to grow their brand awareness and address any chatter that comes through Twitter regarding their brands. As an example, a guy named MaxTheBeetle - working for VW - started following me and replying to my tweets when I complained about the lack of grip handles in the back seat of my new VW CC, (I said I have nowhere to hang my drycleaning, and he told me to put it in the trunk. bah!). Dell uses Twitter to give its followers exclusive sale opportunities and product releases. In an article in InternetNews from December, Dell claims to have generated $1 million in sales directly from Twitter. Now that's not a whole lot in the grand scheme of Dell's overall revenues, but it shows potential and growth.

Twitter is quickly becoming part of the national consciousness and lexicon. Clearly the "early adoption" stage is behind us, and the service is going- or maybe it already has gone - mainstream. On his show, Bill Maher has commented on members of congress Twittering live during President Obama's first State of the Union Address. Jon Stewart made it the centerpiece of a bit that made fun of the general public latching on to trends that young people adopt.

The Daily Show With Jon StewartM - Th 11p / 10c

Twitter Frenzy

Daily Show Full Episodes
Important Things With Demetri Martin

Political Humor
Joke of the Day

Twitter is here to stay. Log on, create a profile and start Twittering people... your contribution will help increase the value for everyone!

Stay tuned for announcements on possible revenue models for the service....

Microsoft and The Case of the Bundled Browser

2009-02-25T13:37:00.000-08:00

Ben May tweeted an article on ars technica about Google's participation in the EC's efforts to regulate Microsoft's Internet Explorer browser bundling with their Windows OS.

At this point, is this really a concern? Computer users have grown savvy enough to be able to choose which browser they use, with several available in the online marketplace for free. MS's IE is a browser that works fine for many people, and those who don't like it, for whatever reason, can easily switch to another one. This is evidenced by the growing success Mozilla's Firefox browser, which in January 2009 topped 21% market share, which is a 4% increase from last year (source). Microsoft still has approximately 67% of the market, bu that number is falling quickly and significantly, .

Here's a chart showing browser market shares as of January, 2009:

You know what that tells me? People finally understand that there are choices out there! Firefox, Safari, Opera, Chrome... these are all readily available and easily installable.

As far as bundling IE with Windows, I for one think that a browser should ABSOLUTELY come installed in an operating system. Upon box-opening and setup, consumers should be able to get right out onto the internet. If they didn't have a browser, how would they go online and download the one that they want?

Now granted, MS used to make it difficult for the installation and adoption of outside browsers, but that changed in 2001 with United States vs. Microsoft. Looks like the EC wants to revisit that, and Google - champion of self-regulation - is jumping on the gravy train to try and cut IE out of Windows. Google's cash-cow deal providing the search box for Firefox, and the release of their own browser Chrome (also with built-in Google search, of course), is a great incentive to try and loosen Microsoft's hold on the browser market, but it smacks of hypocrisy. Tell you what Google: make a browser that people want to use, and they will use it! I promise you!

And what about Apple? Their OS X comes paired with their Safari browser, but no one is demanding they unbundle it. Maybe as their market share grows, regulators could take a closer look at them.

Wow! I never thought I would be defending Microsoft...

Circuit City going out of business & online retail

2009-02-24T16:40:00.000-08:00

I needed to get out of the house today, and decided to take a drive to Tustin. Why Tustin you may ask? Because that is the closest Circuit City I could find. First Comp-USA, then The Good Guys, now knows Circuit City is going out of business... and I wanted to see the deals. I had heard that everything was on sale from 30-50% off, and thought I might be able to pick up some sweet items at good prices... Boy was I wrong!

Upon entry to the store, I was immediately hit with a wave of regret. The store looked like an earthquake had hit it about a week before. Gone were the amply-stocked shelves, brimming with fine electronic equipment and accessories. In their place were dozens of empty shelves, lonely clam-shelled products hanging solo from mislabeled hooks. What were once 8 aisles of hit CDs and DVDs has beend reduced to about an aisle and a half of close-outs, no-names and Big Momma's House 2. All that is left are open boxes of accessories, little-known titles and floor model TVs, stereos and speakers. Many of the the boxes of smaller products and accessories were open, strewn about hap-hazardly. The employees all had these dejected looks on their faces. All this was to be expected.

What really came as a surprise to me were the prices... they were NOT very good at all! Plasma, DLP and LCD TVs (floor models, open boxes) were "on sale" for 30% off, but those prices were just about what their list prices on line were - new! I looked at a pair of Sony Mdr-As50G headphones. They were 50% off, and STILL came out more expensive than their online counterparts (see link).

And there lies the issue. Everyone credits stores like Best Buy and Wal-Mart for busting CC, but I submit that online sales are the primary reason. Keeping in mind that the entire consumer electronics sector fell by 26% in 2008, online electronic sales fell only 5% in the same period (comscore report Jan.2, 2008). Online, consumers can find a much wider selection of products and marketplaces, not to mention product research and reviews. The only drawback is paying for/waiting for shipping, but that is easy to get over once people realize how much they are actually saving. With the reduced overhead of an online store, they can keep the prices lower. And now, with increased consumer price sensitivity due to the economy, (we're in a recession, you know), look for those people who continued to patronize brick-and-mortar because they liked the idea of getting what they want right away or because they were not yet comfortable with online purchases to begin to shift their purchasing patterns more online.

Personally, I don't remember the last time I bought any electronics at a brick-and-mortar store, and with my little Circuit City pricing experiment, I don't know the next time I will.

Eddie George	1997	1998	1999	2000	2001	2002	2003
Games:	16	16	16	16	16	16	16
Rushing Yards:	1,399	1,294	1,304	1,509	939	1,165	1,031
Rushing Avg:	3.9	3.7	4.1	3.7	3.0	3.4	3.3
Receiving Yards:	44	310	458	453	279	255	163
Total Touchdowns:	7	6	13	16	5	14	5