Internet Trends

Drucker and WikiLeaks

2010-12-16T02:01:00.000-08:00

A lot of debate in the civic society has been focusing on what action is justified against WikiLeaks, or its founder Julian Assange, specifically for the confidential leaks of secret cables.

I would here quote from Peter F. Drucker, whose foresight can only be appreciated by what he said, ten years back, in ‘Beyond the Information revolution’

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This is very similar to what happened in the printing revolution—the first of the technological revolutions that created the modern world. In the fifty years after 1455, when Gutenberg had perfected the printing press and movable type he had been working on for years, the printing revolution swept Europe and completely changed its economy and its psychology. But the books printed during the first fifty years, the ones called incunabula, contained largely the same texts that monks, in their scriptoria, had for centuries laboriously copied by hand: religious tracts and whatever remained of the writings of antiquity. Some 7,000 titles were published in those first fifty years, in 35,000 editions. At least 6,700 of these were traditional titles. In other words, in its first fifty years printing made available—and increasingly cheap—traditional information and communication products. But then, some sixty years after Gutenberg, came Luther’s German Bible—thousands and thousands of copies sold almost immediately at an unbelievably low price. With Luther’s Bible the new printing technology ushered in a new society. It ushered in Protestantism, which conquered half of Europe and, within another twenty years, forced the Catholic Church to reform itself in the other half. Luther used the new medium of print deliberately to restore religion to the center of individual life and of society. And this unleashed a century and a half of religious reform, religious revolt, religious wars.

At the very same time, however, that Luther used print with the avowed intention of restoring Christianity, Machiavelli wrote and published The Prince (1513), the first Western book in more than a thousand years that contained not one biblical quotation and no reference to the writers of antiquity. In no time at all The Prince became the “other best seller” of the sixteenth century, and its most notorious but also most influential book. In short order there was a wealth of purely secular works, what we today call literature: novels and books in science, history, politics, and, soon, economics. It was not long before the first purely secular art form arose, in England—the modern theater. Brand-new social institutions also arose: the Jesuit order, the Spanish infantry, the first modern navy, and, finally, the sovereign national state. In other words, the printing revolution followed the same trajectory as did the Industrial Revolution, which began 300 years later, and as does the Information Revolution today.

What the new industries and institutions will be, no one can say yet. No one in the 1520s anticipated secular literature, let alone the secular theater.’

Surprisingly, the Internet now seems to be challenging what the printing press created and nurtured - the very concept of sovereign national states, primarily the most powerful of it on the earth today, and how it works.

I invite you to visit my blog, Wondering Man (or take a look at my book, Wondering Man, Money & Go(l)d that rightly predicted the housing-led economic crisis of 2008, rise of gold prices to the currency war being played now). You are also invited to join me on Twitter.

Internet, Media and Society - Part II

2010-03-17T04:39:00.000-07:00

Part I of the article can be found here

It’s time for me to explain now why I feel the most critical impact of Internet on society has been through the impact of Internet on media. Because a media as powerful as Internet is, and having as unique characteristics as Internet has, influences mankind with a multiplier effect than what traditional media influence, in all its forms, has so far been on mankind.

Importance of real time news in our knowledge economy has grown manifold; and Internet offers true globalization opportunity to these news media organizations.

BBC, in its Superpower series, is exploring the extraordinary power of the Internet – as a global superpower in its traditional sense or as a superpower affecting lives of individuals individually. The recent Google-China dispute highlighted why China is concerned about losing its softpower status to a US firm trusting US federal Agencies for its problems originating from China. Internet can be used effectively to have complete and total mind control of many of its users; at the same time the users are likely to have choices online so that they can trust some Internet media companies more than others in permitting these media companies to have the control of their minds, knowingly or unknowingly, temporarily or for longer durations.

The unique characteristics of Internet continues to make it more and more powerful, probably more powerful than any other single tangible entity in the world. Many consider Google as a softpower. That’s a result due to our reliance on Internet for information. The power of Internet as a softpower not only is much more, it’s also comparatively more permamnent than transient power enjoyed by Google. The problem is, Internet itself can not be counted as a single entity in the softpower equation as an influencer; although actos within it like The NYT or The BBC or even Xinhua (in Chinese context) may enjoy that status in future.

The impact of Internet as a true globalization force is probably understated. It’s actually through media again. More of it would surely follow as more and more people get connected (nearly four-fifths of the world are yet to be online), and go through the quick online learning phase to know whom to trust on the online media space. It will therefore be natural to expect vested interests, having immense business or monetary or military or technological prowess, would always be interested in controlling leading media sites on Internet to have some control over the minds of the users.

In a local context, there’s a Bengali film made by Satyajit Ray in 1980 titled Hirak Rajar Deshe (In the land of the diamond king). The movie talked about an invention called ‘Jantarmantar’, a chamber for brainwashing for the people who don’t fall in line with the power-lobby.

Google therefore becomes more of a media company with every passing day than a leading Internet technology company to the Chinese policy-makers as they justify their decisions to have a tab on it. To most of the world and to most of its users, that’s how Google is perceived, as the Gateway to all the World Wide Web’s media-content. It essentially controls media in all its forms - be it communicating media, informative media, or participative media, from the consumer side alone, by directing consumers to their desired destinations out of available universe of content. For online media, Google is more than what Wal-Mart is for physical goods, where consumers come to find what they need.

So I see great future, following the poker model and not for the chess-board model, for great newspapers having great online delivery models. At the same time, I am not sure about business sustainability of many other newspapers not having neither global nor local expertise. In the Indian context, many of the popular news portals like rediff, indiatimes, sify must be wondering nowhere as matured readers move to other sites for many of the services these sites offered, but didn’t champion in any. The future of many online versions of newspapers in India and in many other countries look equally uncertain. It’s a question of time. There may be a time when there will be newspaper circulations, but they won’t be able command ad-rates proportionate with their circulations or in comparison to similar online viewership sites for news content.

There will always be exceptions as exceptions prove the law. The Hindu in India has the chance to be The Guardian in Indian context by having larger share of online readers beating papers like The Times of India having much higher physical circulations. In the Indian context, it’s indeed unfortunate that India, a nation or more than 1.1 billion populations, is yet to have a truly global online media company.

China that way proved lucky due to its linguistic uniqueness. One may alternatively argue that global players playing responsibly in a highly competitive market; there’s no need to have local media players for nationalized control of mind share. That largely depends on the context of the situation.

There must be many other nations like India, having lots of traditional media companies, but none having the ability yet to transfer online to be globally reckoned in its local relevance or global scale. That’s the untapped market that truly global news organizations/media companies can capture eventually.

It may be a slow process, but Internet has often proved us wrong in terms of its speed. With disruptive technologies, we tend to overestimate its potential in the short term but underestimate same in the long term.

Underestimating the force of media or financial sustainability of companies affected by present digital anarchy therefore can prove wrong over time as media, real strong media companies, be it creators of media-content or its delivery partners, can eventually emerge to be the real big winner of the Internet wave. The same changing dynamics of Internet-led evolutions that so long caused the downfall of media companies is likely to offer unparalleled opportunity of true globalization to media organizations as users mature online. Google is the best example in hand.

A more powerful Google may not always lead to weaker bargaining power of others in the value chain. As Internet users mature, consumers would be more proactive in their preferences in selecting their source of media and news than leaving it to Google, however good Google may be.

Google may show the path, but the final destination will be selected by the consumer. The globalization opportunity that Internet offers to media organizations, more so to real time newsmedia organizations is unique. Sooner or later, many of these reputed news media organizations would acquire softpower status as Google did. Consumers braced Google early as it’s low in the learning curve in Internet-media (as a low hanging fruit), higher order media organizations higher up in the value chain of content creation may take longer time as consumers globally need to learn about them and be convinced about the merits of following them.

Therefore it still is prematured to state what is likely to be the most critical impact of Internet on society in future. However, whatever that be in future, it will be through the impact of Internet on the media - be it the way we create it, be it the way we participate in its creation or be it the way we consume it.

(C) Ranjit Goswami

Internet, Media and Society - Part I

2010-03-17T04:32:00.000-07:00

The widely popular third verse of the ‘Book of Genesis’ in the King James Bible is synonymous with the metaphorical meaning of dispelling ignorance:

‘And God said, Let there be light: and there was light.’

God might or might not have said that. Please don’t get me wrong. I don’t want to hurt any religious sentiments. I myself am a believer in God.

Irrespective of the veracity of above, the custodians of God themselves, the churches tightly kept that light of enlightenment within their clutches till the arrival of the printing press.

The probability of God declaring, on the same scale, ‘Let there be Internet’ seems to be much higher. And there was true light of enlightenment that, over the time, spread over mankind.

(One can argue that light is God-given when Internet is invented by mankind. After all, we all are His children!)

I think so, may be because I haven’t lived without light. I have lived without Internet nearly for the first three decades of my life. And then I saw before my own eyes how that message of God unfolded in reality. And it keeps on unfolding. To appreciate the value of something, one needs to live without it.

In the research world, one seldom faces research questions like ‘what’s been the most critical impact of Internet on society?’ Because it’s equivalent to asking what’s been the most critical impact of as important as light on society; or as Bill Gates puts it more tangibly, as important as sum of electricity, telecom and automobile put together on society.

In-spite of all the criticisms Gates faces for Windows, I am ready to overlook all that for this single realization, that too way back in 2000. (And in-spite of all that forecasts; Microsoft is yet to make it big in the Internet world as it could have).

A handful of academicians (Nie and Erbring, 2000) asked similar questions, but answering those proved to be equally difficult due to the very nature of disruptive Internet and its rapid evolutions. Technically speaking, Internet isn’t a single technology but a cluster of technologies (Wolcott et al., 2001), many of which are again disruptive. All of these, with the help of unique characteristics of Internet, further created an atmosphere of further innovations – radical or disruptive in nature.

Moreover, academically speaking, impact of Internet on society can truly be sensed once a sense of stability prevails; however the more Internet changed society, the more society feels the need of change with the newer and newer powers of Internet.

It again varied from society to society as one can see in open societies versus in closed society like China where Internet gets heavily censored.

The best and the worst impact of Internet have probably been on media. Internet is more of an e-media enabler than being an e-business or e-governance or a communications enabler. It all depends when one takes inclusive definition of business, governance or individual usage of Internet along with that of media. Governance is all about how it communicates and transacts with stakeholders of governance, or how it forms it policies for the betterment of the stakeholders. So is business. Internet offers most of those as a media.

Internet acts as a mass-media to a niche media, as a communicating media to a transacting media, as an informative media to as a participative media, as a one-to-one to one-to-many or to as-you-like-it media characteristics. And all that at unbelievably low cost and high convenience – both for end-consumer and for content-owner in the online media-space and at real time. It also has its inherent global as well as local characteristics.

The true impact of Internet has therefore been in rebalancing the bargaining power of so long ‘faceless people’ of society – in its individualistic form as a person in any society to its collective form as a society; or in the form of societies of society in its global sense. In this new-age Internet media, the consumers, be it for business or governance or for media-consumers, are no longer voiceless. The sooner the business, government or media creator gets it, better is their chance of survival.

An example to illustrate this would surely help. Lately, there’s been a distinct shift in mainstream media in its attitude towards the Wall Street (since 2008 or little before that). However that anti-Wall Street sense was much intense in the new-age media companies since 2004-05 or even before that. Society, not only in the US but globally, realized the drawbacks of entities like the Wall Street much before main-stream media sensed that (or reported that due to commercial reasons). The financial crisis of 2008 acted like the fuse when mainstream media probably realized their shortsightedness, and changed stand, more so in developed world (in the US or in Europe). Otherwise, many of these mainstream news-media organizations might have been irrelevant at Internet speed by now.

Due to unique characteristics of Internet as a media, effect of Internet within media has been the most on the newspaper industry, due to the unique business model of newspaper industry. Its direct costs are offline; its future revenue stream is online. One can argue impact of Internet has been more on music industry (another media), however there it has been worse only for the producers and best for the consumers. More importantly, music does not control mind and actions of the consumer as much as informative news does.

For newspaper industry, they not only see rays of hope through a dark tunnel; rather they see sunbeams of blinding light depending on the perspective. The problem is how to translate that hopes into real time revenue? It’s not the problem that only online newspaper industry has been facing; it’s the same problem many other online business models still have been facing.

Therefore it’s not unexpected that two of the best articles (that I came across) on how Internet has been changing society came from two of the most affected parties. One from Bill Keller of The New York Times, and another from Alan Rusbridger of The Guardian.

While talking about impact of Internet on news-media, Keller referred to Isaiah Berlin. He stated: ‘Isaiah Berlin famously divided the intellectual world into foxes and hedgehogs — the hedgehog knows one big thing, the more promiscuous fox leaps from idea to idea. The internet is a fox medium, that’s fox with a lower case ‘f’. It is perilous to get locked too firmly into one big idea…’

(It would be interesting to see how Google or China’s policy makers from the Communist Party, both sort of getting locked too firmly in opposite views on the power of Internet, meet their respective outcomes in future).

The recent move of the New York Times to experiment with some mixed model of paid content bears this thought. One can understand the pain that these great journalists have been bearing to justify the model; albeit as a reader I belong to the vast majority of the Pew survey outcome on what percentage of us are willing to pay for online news content. It is more so when exclusivity of such content is in seconds in the online world.

Reading Rusbridger reminds us ‘the best of the times and the worst of the times’ conundrum that the journalistically value-based newspaper industry has been facing. Rusbridger, for the time being seems to be ‘firmly locked into one big idea’ of keeping the content of The Guardian free. Because it has helped the organization, which was much smaller compared to the size of The NYT, and therefore could easily ride with the Internet wave.

I get reminded that Internet isn’t a game of chess; it rather is a game of Poker. Same media, same journalistic values, same Internet, following same business model so far – but the outcome seems to be vastly different that prompts them to follow partly different paths. Therefore in the battle of Google.cn versus China’s policy-makers from the Party, the final result will depend on subsequent developments (few developments where neither China nor Google may have any control) and their respective decisions and actions.

Google’s withdrawal from China, if that happens, would be the short-term irrelevant outcome of the starting point of the battle. The outcome of the real war between power of Internet and China’s policy-makers from the Party would depend on subsequent rounds of cards drawn. That’s for the intermediate future.

There is no scope of debate on the final winner in the longer term.

Part II and the concluding part of the article can be found here

(C) Ranjit Goswami

'YOU' and the global reform

2007-02-03T00:43:00.000-08:00

Much debate is taking place all around the world on the impact of Web 2.0. A closer scrutiny of many of these debates, focusing on the impact of Web 2.0 on micro-issues may make one ponder on the macro-impact this can potentially bring – that of an unprecedented reform in the way Governments and theirs policy-makers work, on a global scale, and thereby impacting all its nations sometime in the future.

By now, we all are aware of the often-repeated catch line that change is the only constant in this universe. However, in-spite of much change taking place in the world post World War II, we haven’t seen significant changes in the level of Governance and also in policy-making globally. Whereas market forces have grown stronger and stronger in this last sixty+ years, income divide has increased to catastrophic level within countries and within societies of countries, climate change has come out from an academic debate to policy-making stage, terrorism has increased with the definition of a terrorist (and that of a rogue state) meaning different things to different people, and in-spite of people’s governance, in the name of democracy ruling in most part of the world; nearly half of the world still struggle within various definitions of poverty although there are clear indications of abundance of resources on a collective basis globally.

Where has things gone wrong? Or, looking at same indicators and environment more optimistically, one may say that’s the best that could have been done in those last sixty years. Irrespective of which side of the table one belongs to, the debate now is whether the continuation of same set of policies and governance should continue for the next few decades, thereby either leading us to even stronger market forces, even more skewed income divide, more climate refugees around the world, more terrorism and counter terrorism (and more rogue states); and on the other side stating indicators like % of people below poverty line may have gone down with better non-monetized measures like better life expectancy at birth, lower child mortality rate than what they were back after World War II, indicating everyone may have benefited from the unprecedented economic progress that our world has seen post-World War II.

A careful scrutiny may however lead one to believe that the benefits that mankind in general got in last sixty+ years were results of scientific and technological progresses, and that of innovations. One may argue that the economic environment was successful in creating and nurturing those innovations and radical technological shifts. Therefore the debate should focus on whether impact and coverage of those innovations could have been passed, hypothetically, to a higher % of global people at a faster rate or not; or whether that’s one of the best that could have been done. The point of contention and debate therefore shifts between two expertise groups and on their performances – the scientific community no doubt did an excellent job (they invented those WMDs also); however as scientific community don’t decide on how the benefits (or destructions) are to be shared; the debate now shifts on the performance of the policy-makers on effectiveness of their policies in sharing the outcome of the scientific community.

Have these policy-makers done a great job so far by meeting the demands of the growing human population, well not equally but to some extent; or have they failed miserably resulting in much of the chaos in which we find ourselves in, and which is expected to aggravate with each passing day and generation.

A look at the status quo on how our policy-making platforms have increasingly failed is palpable from the structure of the apex global body itself – that of the UN. In what matters within UN most, in its Security Council, 10% of world population controls 80% of the all important vetoing right. Cases like the Iraq fiasco, where UN sat and watched as US and allied forces invaded Iraq in what it termed as ‘illegal’ have raised more queries in the relevance of the UN in present modern world. Same is true in WTO platform where close to a billion people (less than one-sixth of the world) from US and the EU can hold free trade discussions to ransom, policy-making platforms failed to make any progress of Doha round in Cancún (in 2003) and Geneva round last year (prompting Peter Mandelson, the European Trade commissioner to state ‘The alternative to what's on the table is not the perfect deal, but no deal at all’), and increasingly raising questions of Government-owned-and-controlled policy-making platforms utility, purpose and their existence.

Thankfully, as importance of UN decline and continue to dwindle to the status of Titular Heads that many-a-government has, as importance of Governments in most nations in meaningfully impacting (or bettering) the quality of the lives of its citizens reduces, market forces have come up and have occupied that vacant place, one isn’t sure whether more than what was vacated or less, and whether that’s a desired welcome sign. And therefore we see that World Economic Forum, founded by Prof. Klaus Schwab, and having started without any policy-making official status, the yearly event that recently concluded in Davos now comes to the rescue – be it for renewing the Doha round or to debate on climate change. And compared to its official status, this ‘private party’ of global business and economic leaders has become successful in resolving many a global issues, temporarily or permanently.

I am not sure on how to interpret this trend, going forward. The good thing is, market forces, when markets are indeed free and fair, have mostly (at least so far) yielded better results than Government initiative. The bad thing is, Governments control the market forces, through policy-measures; and more so by the all important continuous increased money supply. Ultimately market forces chase that money that Government creates thro’ its ‘fiat’ promises.

Internet (and broader ICTs as such, however internet due to its one-to-many anytime, anywhere communication possibilities), again discovered by scientists somehow was not limited within the hands of those policy-makers. Suddenly a discovery of the scientist community (true, thro’ US Department of Defense and ARPANET) have broken the shackles of the policy-makers, and have reached the masses. Also true, policy-makers now increasingly debate on how to control this force called Internet, however the force has already grown and continues to grow stronger than many other forces, and may be the metaphor of that Frankenstein’s Monster (in the +ve sense, I mean).

So China is concerned about the good and bad things that Internet may bring to its single-party social fabric; US war mongers are afraid that thro’ internet people come to know what they should not know as they were ‘classified’; British Prime Minister feels media is to be blamed for his growing unpopularity at home (and more so globally?) however making the mistake as if media is any more in the control of few organized Moghuls, and has not reached the stage of mass-media; and so forth. Copyrights owners and policy-makers that protect fairly the copyright owners are at a loss on the best means to own, price and distribute their intellectual capitals.

Things have started crumbling, true slowly – but make no mistake about it that its falling. Saddam’s statue has fallen; Lenin’s status has fallen, there, however was no statue of any global policy-makers anywhere. If it was there, one can hear small sounds of hammers striking its gigantic pedestal just like there were sounds that could be heard in the Berlin Wall many days before it actually was broken. And what these increasingly sounds mean is policy-makers can’t keep their audience, the billions of global people, away from policy-making stages for ever.

What changes can these apolitical, nameless, pseudo-patriotic country-less, agegroupless millions of people can bring – they can potentially bring the much needed global reforms – starting from the constitutions of those nations to the charters of the global bodies to determining what can be free and fair market forces and trade practices. Internet spreads that much-needed knowledge, true from various schools of thoughts, that can potentially bring in a true democratic society closest to the utopian dream. The world and humanity across the world wants to unite, our policy-makers want us to remain divided across various lines.

Not so soon, not so fast…Internet has not yet reached 5/6th of the world. However along with the much-needed food that satiates our hunger instinct, internet is the only other means that can satiate our curiosity instinct, our quest for knowledge.

And even with that low base, the alarming call to the policy-makers ring loud and clear. Wake-up, before internet makes policy-makers also irrelevant as it promises for many other staffs. True, they won’t vanish – they would exist as would News-Papers for many-a-year; however they would only be irrelevant, and would continue as the legacy of their time.

Internet is mightier than the biggest national force

2007-01-13T18:39:00.000-08:00

The figurative ‘pen’ in the age-old axiom ‘the pen is mightier than the sword’ never fought any battle with the sword. The outcome of any such historical battle would have been devastating for mankind. The pen could have never won any battle against the sword, mankind may not be sure whether it ever won any war against war mongrels or not, unless that war is a long lasting one.

Unless that war is the continuous evolution of mankind, in evolving historical perspective, as we move on…
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However, on the longer run, starting from French Revolution to other similar events in history, the figurative pen proved to be mightier than the sword; the right-minded intellectuals won over the war-loving rulers, may not be in their life time, but in the longer term.

The figurative pen has now been replaced with the internet, in a larger context. And what the earlier versions of pen and the papyrus could do to a few, the printing press could do that to many times more - that of spreading the truth, making sense of our environment and the surroundings, and making more and more people aware about ‘the truth’, if, there ever was one single truth in socio-economic perspective.

Mostly there are different schools of thoughts, and not ‘the truth’.

Long live the pen, down with the sword…here comes the internet…be aware, all you lovers of that figurative sword…

And the internet just gets more and more powerful by the day without showing any sign of maturity, as of now. Jon Katz, while writing the obituary of Jon Postel, one of the father-figures for internet, noted ‘No government agency is in charge of it, no academic committee designed it.’ That was back in 1998 – there still was no blogs, no Google News, no YouTube, and internet user base was estimated to be 150 million, 1/7th of present figure.

Looking at few cases, four specific ones in this article would showcase how powerful this internet has indeed been… and unlike that earlier medieval age of pen where one generation wrote it and next generation got that material; it’s sort of instantaneous now.

Our first case is that of the execution of Saddam. The Shia-controlled Government, led by Prime Minister Nouri al-Maliki, decided to document that execution to ensure that Saddam does not only get eliminated physically from this world, but also gets eliminated from the minds of millions of Iraqis who were fearful of that regime for decades. So far so good – a group of people from Government and judiciary, from Shia community supervise that execution.

And then the world gets a video, that too without the very last moments, without any audio. Global press, in the age of internet was only too keen to cover that incident as best as possible. And that made the professionals too make a faux pass – based on inputs received from people in the execution chamber, who expectedly may have been biased against Sunni Saddam. CNN carried an article titled ‘Saddam executed with ‘fear in his face’. The official video didn’t show any such fear. However it didn’t cover the very last moments either.

Then came the unofficial release – and media, who all carried ‘fear in his face’ had to rewrite their articles, or show loss of face. And so did CNN, where they changed even the title of that article to ‘Witness: Saddam Hussein argued with guards moments before death’. Was not convincing, but better than the earlier one.

YouTube video made even aides to Secretary of State Condoleezza Rice acknowledge “the idea that of all the people in that room, Saddam Hussein was the one who looked like he had the most dignity.” So Saddam lived well in a dignified manner doing all undignified things for decades, and when someone wanted to bring him to justice in a dignified manner committed all the undignified wrong things in the execution chamber leading him to a racial death. Another aide and partner in the coalition, and likely successor of present Prime Minister Tony Blair, present Treasury Chief Gordon Brown called the event ‘deplorable’, and Blair himself termed it as ‘wrong’

Internet made that possible – though the purpose of releasing the unofficial video may have been different, the whole world viewed it differently, mostly.

While on Tony Blair, whose bad moments seem to be hounding him with continuous Iraq misadventures since his decision to be cheer-leader of Bush-administration in their Iraq adventures four years ago; the eloquent Prime Minster now finds his eloquence failing him even in generating temporary sympathy, and thereby gets impatient on media for all the domestic impatience on Iraq war, and presence of British troops there. Mr. Blair makes the same mistake as he did in Iraq – don’t kill terrorists, kill terrorism. So don’t blame it on media, blame it on the democratic nature of the new technology called the internet.

So Blair shoots the messenger by shooting at his own feet…it would take a lot of time for many of these global leaders to understand and adjust to the power of internet.

As I said, Internet is mightier than the Bush-Blair era, the (organized) media (and as 1st example showed)…I am still not sure what should replace sword in that age-old axiom.

The above two examples don’t exonerate this democratic media riding on internet of all things it does. So, let’s take a look at two other cases now, from so called emerging BRIC blocks – one about a Brazilian model, and another figuring Mahatma Gandhi, the ‘father of the nation’ for India. The contrast could have been more palpable.

Brazilian court apparently ruled in favor of the model, Dania Cicarelli and asked YouTube to block that video some six months back. In-spite of one time success in blocking it, and due to impracticality of blocking it practically for ever in any User Generated Content site where there exists no entry-barrier (do many videos in YouTube have zero viewership), YouTube expectedly failed later. So Brazilian court ordered shutting down YouTube in Brazil; and lifted that (Brazil) ban again on 9th of January after YouTube could fulfill that court order.

However, even during that ban period, that video was available in umpteenth sites globally – even through links in digg.com, another 2nd generation web-portal. Yes, the video was steamy – however it was shot in a public beach, and no privacy, important for all human beings, have apparently been violated. If anyone can engage in sexual relationship in public places, any one can shot that too – may go one school of thought with many takers. However, same logic finds fewer takers when paparazzi haunt Ms. Middleton, expected to be engaged with Prince William, and elder son of Princess Diana, who met with a fatal accident leading to her death almost ten years ago, again caused by paparazzi haunt.

The other incident involves Gandhi – father of India, and who showed the world that one can get his/her rightful rights by non-violent protests also. Gandhi remains sacrosanct in India, rightfully or wrongfully. Statue of Lenin did fall after Soviet Russia fell, Beijing continues to purge Mao in its history text-books, however in India, and political establishment may not be that open for even an academic discussion on Gandhi, other than that being his worship. So one Non-Resident-Indian (otherwise if he was in India, he could well be behind the bars; readers need to be informed here that I live in India) raises a lot of noise by posting another video, again on YouTube. Overall, it’s a no-brainer, but in the race of genuine respect or sycophancy, leaders of the political establishment create an ‘issue’ from a ‘non-issue’, and add more controversy. And controversy, like sex, sells – be it news, or video or in votes.

All the above four are just a very few pebble stones floating in the vast sea of internet. "I do not know what I may appear to the world; but to myself I seem to have been only like a boy playing on the seashore, and diverting myself in now and then finding a smoother pebble or a prettier shell than ordinary, whilst the great ocean of truth lay all undiscovered before me", stated Isaac Newton. Internet is not all that great ocean of truth only, agreed; but it also is that great ocean of truth to the nearest extent possible, with a few pebbles that may be injurious to few naïve minds, expectedly. And it definitely is more credible than most of our Governments (& its propaganda) or media individually would like us to believe in.

It’s the collectible, democratic result that UN could not master, democratic Governments could not achieve. If wealth can be controlled with market forces where top ten business families in Mahatma’s India, based on market forces, can own $112 billions of wealth, and be home to the 2nd largest number of billionaires other than US, when other common India, with nearly half the illiterate and poor people of the world can, along with 5% of rural Indian population (3.5% of Indian population, close to 40 million people) living below $0.20 daily per capita consumer expenditure (and 95% of rural population had daily per capita expenditure less than $0.82, that’s two-third of Indian population), why not allow that market forces to play in controlling media as well.

People from both schools of thoughts - who are uncomfortable with the might of Internet and who would like its power to grow with more and more users using it more often would interpret another piece of statistics differently – that this power has not yet reached to nearly 5/6th people of the world.

And people with the power to state what’s right and wrong is already feeling that seismic shift…

The pen is mightier than the sword…long live the pen…here comes the internet, mightier than its predecessor, the pen.

Incessant media revolution thro' creative destruction

2006-11-25T06:25:00.000-08:00

Media is in the grip of ‘creative destruction’, a term brought into economic discourse in 1942 by Austrian-born famous economist Joseph A. Schumpeter in his book titled ‘Capitalism, Socialism and Democracy’. So long the term was mostly associated with the core of any vibrant capitalism, however present round of incessant revolutions, destructions and creations of new media-channels make one sit-up and wonder the real-driver behind this round of revolutions brought in by the disruptive technology of internet and its channel of access through broadband. Capital flows eventually where the market is. It’s more of a democracy than capitalism this time round. So long the mass followed the media, but this time round the media, more so its distribution channels, pro-actively or reactively are following the mass as the power shifts to the mass resulting in a shift in flow of capital too.

Creative destruction is a powerful economic concept that can change any industry dynamics – and this time in media it’s caused by a multiple of factors playing together in favor of that creative destruction towards e-media starting with new markets (through reach of internet and mobile networks), new equipment (Microsoft’s XBox 360 console-TV connection/Live downloads and saving, new-age mobile handsets, IPod), new sources of inputs (blogs, user-generated content - citizen journalism being a part of that), new methods of distribution, and communication (when and how and at what price point consumer wants it), and as expectedly consumer wants the best with the least cost, new methods of advertising and marketing over internet and mobile devices emerge to follow the elusive prospective consumer.

Wikimedia defines media in multiple categories like electronic media, mass media, news media, multimedia etc. where each of those categories now face the same creative destruction because of the ongoing structural shift over channel from which consumers consume content of any media. It includes everything that comes to mind with any information or entertainment – books to newspapers to banners to CDs to films to computer-games to www to any form of publishing. Media’s journey began with first printed work back in 868 AD in China (Diamond Sutra), Gutenberg’s printing press giving its first book in 1453 to newspapers that emerged in the beginning of seventeenth century and proliferated only in the nineteenth century to attain the status of mass media to radios in the beginning of last century to TV by middle of last century to mobile devices and internet in the end of the century (public release was in 1991), and their rapid penetration have brought us in this present time of media revolution. The stakes and the reach have only got higher in each stage of continuation and transformation of this eventful journey.

Wikitionary defines media as formats for presenting information. Following that definition, the impact of this disruption is even higher because it keeps the generation of information or content away from that definition. With increased user-generated content in open compatible and convenient platforms, even the content creators feel the heat, may be to a lesser degree. Higher the barrier for that creation (a high-budget movie, music or expertise needed to produce that), lesser is that heat for the moment; but there is no corner in whole media space that’s isolated from this present bout of creative destruction.

So long the consumer followed the limited media-delivery options as content generator and distributors could flex their muscles over lack of options to the consumer. The control of the industry is shifting to the consumer in an unparalleled manner. Napster, the free music download-site of first dotcom wave failed not because of consumers lacked interest in it; rather consumers wanted to send a strong signal, a signal of strong disapproval through it to the music distributors about the inefficacy of their age-old useless model of selling music over CD at a very high price. The cost paid by the consumers was not high so that distributors could make exorbitant profit, it was, and still is an unproductive supply chain (cost of retailing and production). And in-spite of the high cost paid by the consumer, the consumer could not listen to the music s/he legally bought anywhere, anytime in any medium s/he liked.

Napster lost to the legal world as it violated the ownership of copyright acts. The same battle of ownership of copyright is replayed in internet world again within years, this time between Universal, part of the world’s largest media group, Vivendi of France and MySpace, owned by media-giant Murdoch (News Corp); and also between Universal and Sony (Grouper.com, the online video-sharing site owned by Sony Pictures Entertainment). And unlike the last case of Napster, when advertisement on net was still at its infancy and new-born Napster didn’t have the support of any big sugar-coated corporate daddy; this time the battle is more amongst equal, if not in favor of the so-called violators.

In a landmark judgment in US in an apparently different area but that can have repercussions over copyrighted content eventually, the California Supreme court absolved any blogger or ISP for containing any third-party posting of defamatory content; and shifted the responsibility to the original person behind that defamation. Though all these aggressive cases of Universal are subjudice; responsibility of shifting copyright violation may similarly be shifted with persons behind that violation than making it the responsibility of any site, which only provides a channel of expressing user-generated content. Universal, in its filed lawsuit against MySpace termed the site more as a ‘user-stolen content’ than as ‘user-generated content’.

The debate has probably just begun as billions of dollars are at stake, not only the $400 billion plus ad-revenue which would move along with consumers’ tastes and preferences; but also global music or movie sales. As per figures of the International Federation of the Phonographic Industry (IFPI), global music sales continued to fall in 2005 ($21 billion for companies and $33 billion at retail price level showcasing the inefficiency) whereas online music sales tripled ($1.1 billion). Online and offline piracy is attributed as the major reason behind this declining music industry (markets like China is accused to have 85% pirated products). Expectedly the debate over fair implementable copyright act over this revolution of new internet and mobile channels would also grow strong. Governance anywhere comes with enabling laws foreseeing diverse scenario. However in periods of rapid change, be it the industrial revolution back in Europe or the case of ‘Muckrakers’ in US in the beginning of last century, policies towards basic rights of employees were inadequate; and employers tended to exploit employees. Balanced policies eventually evolved. A similar trend is found in the interpretation and ruling, as legal opinion prevalent in European nation differed from that of US in case of defamatory content, where service providers in Europe are expected to expeditiously remove or block defamatory material they host once they are made aware of it, lest they can be sued whereas in US court ruling, following a more practical approach and probably showing a better understanding of the impossibility of the task on service providers like Google and Yahoo! and that lot, it favored ISPs and bloggers.

Retailer of a faulty of harmful product can’t be sued, its manufacturer can be. However a liberal policy of allowing any retailer to keep on selling (or even freely distributing) harmful products also needs to be tackled. A lot of clarity is expected from the outcome of these two high-profile lawsuits that would determine rights and responsibilities of ISP, subscribers and original content creators.

21st century is termed to be driven by knowledge economy – however there is yet no comprehensive policy over fair usage of that knowledge-based digital output’s distribution for mass usage. If pricing of any product that the consumer wants is beyond the price-point that the consumer can willingly bear, or the convenience offered by any legal product is less than the convenience offered by same product as could be obtained otherwise; consumers would naturally side with the advantageous side for better benefits. Examples of first can be pirated versions of softwares or counterfeited goods as found over developing countries like China, India (and also all over) and the examples of 2nd category is copyrighted music video or audio in sites like MySpace, or even clippings from New York Times over individual blogs, on which again the paper took some aggressive posturing sometime back.

These are essentially not for resale, however direct commercial revenue comes through advertisements. In cases of MySpace (or a YouTube), the benefit is accrued by the site whereas violation may be originating from the user.

It would be interesting to see what position our upstart OMNI takes in this regard as many of us – the citizen journalists – have seen our articles being reproduced in many other blogs. As citizen journalists, we feel good about it as being a mark of recognition; however recognition alone does not bring in much needed money.

The fight, actually is all about that money in the guise of copyright, fair practices and about possibilities of implementing of that fair practices. Freedom once given is very difficult to be withdrawn as was seen by Napster. Napster didn’t succeed in the long run, however the habit of having free music survived in many of us later on.

No one is sure and certain on the direction of this present round of incessant revolution, incessant destructions and incessant creations (as Schumpeter did put it) in media-space. A relative stability hopefully would be reached where consumers and society benefit more along with other stakeholders in a balanced manner. The older generation can tell present generation stories on availability of media in their early lives with limited channels from old, large radio set-ups and newspapers to limited channels in television, to present plethora of TV channels, radio channels combined with anytime, anywhere media feature over internet and mobile devices.

The trailer of this media-movie in the 21st century is interesting. No doubt, the full movie is only expected to be much more thrilling with its usual winners, losers, heroes and villains. The characters, old and new alike, are all ready for the emerging creative destruction fight over billions of dollars in the turf of media.

It's e-media, stupid!

2006-11-21T03:36:00.001-08:00

There's been a lot of debate and discussion on e-commerce globally starting with dotcom boom, bust and its subsequent stronger than expected revival. Though the central theme remains the disruptive potential of internet in all things we do, it's no more commerce that's driving this revived interest in dotcoms in its 2nd comeback.

E-commerce and its various associated models - be it B2B, B2C are no longer where the private money and younger audience is flocking. Investors and Gen-next hate a matured internet, whereas business models on the web - be it B2B, B2C may not be facing the bleak-future that newspaper industry is facing globally due to Web2.0, but are no longer delivering internet growths as well. Growths of most commerce enabled B2C sites have slowed down to more moderate old-economy standards, if not stabilized or not fallen due to pricing pressure and other limitations. It's hard to find a single B2B enterprise, other than probably Alibaba (Yahoo acquired 40% of Alibaba for $1 billion back in August 2005) being valued at more than a billion dollar's valuation. The B2B exchanges, marketplaces, verticals, horizontals still exist - but matter of fact is they only exist without the potential of changing the age-old industry dynamics any more. Erstwhile B2B darlings like Ariba, Commerce One, FreeMarkets, Covisint (created by the three big auto-majors of Detroit, two of which, GM and Ford, are under deep red now) either have merged or been acquired by another industry player and merely remain in the business like hundreds of others looking for that killing applications/business model but never reaching it. Chances of finding any such miracle increasingly look remote.

So the action is no more in e-commerce. But the e-space is looking formidable this time with real potential of changing another industry dynamics. And it's e-media this time. Banner advertisements to search advertisements to models like Pay Per Click (PPC) are driving this new generation of internet growth. And as of now, though voices of concern on valuation and business models are being raised again as was done before the bust back in 2000 on this new generation of user generated content and social networking business models; it looks sustainable to some extent this time so far.

The only party spoiler can again be the old-media companies of repute, if like in the past as traditional B2B/B2C players' regained control of their supply chains against online exchanges or stores with their core strengths. New York Times made an online acquisition, and pushing up its online content management as does BusinessWeek or others, through frequent online surveys. Established media companies have thereby started pulling their socks together, individually and collectively, to take on the new challenge; however unlike in past where business models favored the brick-and-mortars; this time the dice is heavily loaded in favor of the e-media marketplaces. Through far reaching industry reforms, the industry have started offering what the new generation
web2.0 is offering, many times even by violating Intellectual Property Rights by distributing contents generated by the traditional media. It reminds one of the past Napster era, however Napster was not backed by media giants or internet giants like Rupert Murdoch (NewsCorp) or a Google.

In that context recent developments where Universal has sued MySpace over copyright issues can potentially have far-reaching impact how the future of e-media would be going forward. MySpace, a firm acquired by NewsCorp just over a year ago at less than a billion dollar is now valued anywhere between $5-$15 billion now. Google followed suit by acquiring YouTube for $1.5 billion recently. And unlike complexities of past business models, revenue models, value propositions - this time there is only one thing that these sites offer to their largely youth-centric audiences. A freedom to create their own media -
and that's potentially creating the deadly blow to established media companies.

No film marketing company can now think of releasing a blockbuster without an ad in MySpace or in YouTube, so is true for music videos or any new media release. It's not only the newspaper industry that's being affected - but it's all media - starting from audio (music), video (TV, movies) or print (news-papers, magazines) - all are feeling the heat. Experts have already been projecting an era of personalized television viewership not too much forward in future.

Rupert Murdoch in an address back in March this year talked about the death knell that's getting closer to the traditional media. "A new generation of media consumers has risen demanding content delivered when they want it, how they want it, and very much as they want it," he said in that gathering of media-barons in London. Circulations of all print-media has been declining in developed world and so is there advertisement revenue, however many of these media companies have simultaneously seen higher traffic in their websites generating higher and higher share of online advertisement revenue.

In-spite of all noises back in the first wave of e-commerce, no top executive of any brick-and-mortar company ever predicted the death of that old industry, rather the brick-and-mortar companies butchered the high-flying dotcoms easily when they adopted same internet models themselves. There were no revenue models earlier, technology costed a lot, cost of acquisition was high and with web2.0, there is revenue from the beginning, no tremendous technology costs and there seldom was a need for the new-generation start-ups to spend money on advertisement.

Global advertisement spends in 2005 equaled more than $400 billion out of which $18.5 billion (4.6% of total) was spent online. Bank of America projected US online ad-spent to touch $12.4 billion in 2010. Forrester projected a less-optimistic global figure of $26 billion in 2010. And unlike commerce-revenue where companies like eBay charge a % of transaction value as their fees; this whole ad-spend directly adds to the bottom-line of these Web2.0 firms.

Compare this $400 billion global ad-spent with commerce revenue of $5-6 billion of eBay, and its lower than $1 billion net income; or that of Amazon $7-8 billion revenue for Amazon with net income of close to $800 million. In a hypothetical situation of internet commanding a reasonable 10% ad-spent, and couple of players again controlling 5-10% of that spent would get a cool addition of $2-4 billion dollars in their bottom lines.

It also explains why Google's last quarter did beat industry expectations whereas both Yahoo! and Amazon disappointed. EBay was not impressive either. Yahoo! in-spite of having ad-based model did disappoint because ot's spreading too thin in everything under the Sun without a clear focus, as it came out in a recently leaked memo.

New alignments and developments are buzzing in this industry. More than 150 newspapers in US with names like Journal register Co. (Parent of the Morning Journal) have joined hands with Yahoo! Hotjobs to create a US-specific national online advertising network. These 150 news-papers from 38 US states have a combined circulation of 12 million copies, whereas their websites record another 5-6 million readers a day, whereas Yahoo! alone gets 4-5 million unique US visitors each day, still the highest for any site but the gap is getting narrowed from Web2.0 starters like MySpace. Yahoo! is expected to make the reach of those mostly local newspapers national whereas those newspapers would take Yahoo! content available to local audiences better. Google also renewed auctioning ad-inventory of newspapers in more of a partnership style after its first attempt met lower than expected response.

Echoing the words of Murdoch, mobile customers in South Korea - a country with more than 60% broadband penetration is now looking at mobile search applications. 20 million of Koreans access net from their mobile devices as well. Google, the online search leader has tied up with leading Korean service provider, SK Telecom in trying to develop a specific mobile search engine to target this growing base 20 million, many of them already searching internet from their mobile devices as well.

As applications grow, and as people spend more and more time over mobile devices or over internet; content needs to find new means to reach to the right consumer at the time the consumer wants and at the format that s/he wants.

Content, otherwise, is becoming increasingly meaningless in isolated silos. Traditional media companies are well aware of the threats, and the new-age opportunities because of their core competency in generating, managing and delivering contents - be it through traditional channels or through compatible multiple platforms. New-age Web2.0 companies know about the opportunities, and the threats that they face from IPR issues.

We didn't see the creation of a mega-marketplace of e-commerce - barring examples of an Amazon for books or an eBay for various sorts of P2P/B2C items. However there is a possibility that a mega-marketplace of media may become a reality. Where commerce failed to realize its potential, media may make that look as a possibility in near future.

Advertisers would follow us herever we go. And as it's often stated that half of all marketing expenses are a waste - only thing is one isn't certain which half. With new-age electronic media becoming the norm of the day; it indeed simultaneously presents the best and the worst of the times for media players and industry as such.

Murdoch may again be right when in that keynote address he compared Internet start-ups with explorers like Columbus. Columbus wanted to find India, he landed in the land of opportunity called USA; people wanted to find e-commerce that would change the way we did business; they rather found e-media which increasingly is changing the way we consume content.

© Ranjit Goswami. Ranjit is a research scholar with IIT Kharagpur, and the author of the book Wondering Man & The Internet

Investors and Gen-Next hate a matured internet

2006-10-10T07:51:00.000-07:00

Nothing seems to have changed at a faster pace than the trend and user characteristics of Internet. Originally developed by ARPANET for defense purposes, there’s no area in present world that hasn’t been impacted by this 24X7 technology.

There’s been phenomenal rise and fall in its market sentiments – although user base has expectedly grown continuously, touching exceeding a billion back in 2005. As per Internet Growth Statistics – Global Village Online, from a penetration level of meager 0.4% (16 million) of global population back in December 1995, today the penetration level is 16.7% of global population (1086 million). While following developments in internet space, a year seems like an era.

And there was the bubble followed by brutal burst of the bubble during late nineties of last century. Nasdaq collapsed by 60% from its highs of 5000+ (March 2000 peak) to 2000 in next March. Internet stocks looked something not to be touched as it was hammered down by more than 80%.

And then came the body and the long tail of internet. And unlike Halley’s comet, everything has been physically and figuratively swept away by this body and long tail of internet since then.

An inquisitive mind may search how long it took The Big Blue to reach the $100 billion market-cap group. For Google, it was the quickest (less than two year journey). It even overtook IBM in market for sometime in 2006.

That’s the power of omnipresent 24X7 internet.

Digital divide on the other hand is still perverse. A look at the WWW space shows that most of the internet companies and content originate from the developed world.

And in this background came the next generation of dotcoms – a host of emerging social networking and user-generated content sites kike that of MySpace, YouTube, Facebook, etc. And these emerging dotcoms get gobbled up by the old veterans – media giant Murdoch acquired MySpace in July 2005 for apparently $650 million. Analysts speculate its valuation to be anything between $5billion and $15 billion now. Google, the darling of investors and the barometer of internet space had a weak presence so far in video media (less than 1%), and needed beefing that gap up. They now acquired YouTube for $1.65 billion in an all stock deal. And there’s increased speculation since late September that Yahoo! is in the advanced stage to acquire Facebook at around $1 billion.

The present round of activity is a renewed competition post the VOIP race that the established players are gunning for. In that round of acquisition and tie-ups, internet technology brought in disruptive trend in voice communication, and thereby sent tremors across trillion dollar telecom industry. This time it’s the media space – an industry supported by $400 billion of advertisement spends. And share of internet in it is minuscule 4.6%, expected to grow to 6.4% in another two years – and that’s a jump of 40% in absolute value.

It means close to $7 billion more in ad-revenue for internet players from present base of $16 billion. And every forecast in past few quarters only had upward corrections in its future projections.

And compared to the size of $400 billion global advertisement spend, all packaged software sales globally account for $130 billion, and PC industry accounts for $240 billion.

So where do we go from here? Microsoft, the undisputed king of PC era announced the end of PC era. In the new era, there’s internet at the center of everything. But which companies are likely to be at that center, and at what form remains the billion dollar question.

There have been occasional hiccups over growth – investor community always hates a matured industry. In the beginning of dotcom boom, everyone was gung-ho about internet rate of growth. And then came the crash that separated the men from the boys, and since then, there’s been no looking back in internet space. There still were casualties in the form of individual firms facing a slow down as their business models were on the wrong side of this renewed tide.

And there’s been a new generation of user and user-generated content. A generation that learned their alphabets while browsing internet is in their teens now. A look at the 100million plus user profiles in MySpace indicate that young students in their teens or early twenties rule the freedom of this new-found media – with textual content, music, video and what not.

Incidentally MySpace commands 2nd highest page-views now – after Yahoo!. And it overtook Google back in September 2005 in page-views. So unlike the older generation who still wonders over the net, the young generation seems to know their destinations better, and flock their together with their social network.

And these young generations hopefully would not be satiated by any matured models of internet. Kids of internet generations would replace them eventually and it’s only time and innovation that would determine when maturity of internet finally comes, if at all it ever comes in our lifetime.

And till that happens – both investor community and Gen-Next is happy browsing over the net with new terms, tools and practices that veterans like us find difficult to master. And by the time we are able to master one, we find ourselves submerged in the next round of innovative waves of internet.

References (Chart of Internet stock movement): Standard & Poor's, Industry Surveys, And Computers: Consumer Services & The Internet, September 1, 2005