“Amy” in Ball’s State’s “Notes from the Digital Future” blog (published by MediaPost) writes of something that will fuel both the conspiracy crowd and fundamentalist Christians — the movement to a cashless society. She notes that Apple is no longer accepting cash for sales of iPhones (to better track sales) and notes that “where the risk of product alteration and hacking is high, many companies selling cutting edge and technologically advanced products may follow suit and decide to stop accepting cash payments.”

“Unlike cash sales,” she notes, “debit and credit card sales provide a quick and easy way to track buyers.” But it is her tying this to another trend that makes her observation intriguing:

A shift towards a plastic currency can also be seen in the new line of Visa commercials telling consumers that ‘life takes faster money, life takes Visa.’ The commercials depict a crowded and bustling but smooth sailing store or event, which grows disorderly when a customer decides to write a check or pay for a product with cash. In this sense, Visa is telling consumers that the quick and easy way to pay for products is by using a Visa check card. Consumers choosing to pay with check or cash will be ridiculed for slowing purchasing pace and not conforming to the use of plastic currency.

This “ridicule” is a powerful peer pressure argument to get with the program, and I agree with Amy that we’re definitely headed in a cashless direction.

Conspiracy theorists will find resolve for their beliefs that big business and government are aligning to foist Big Brother on the world, while Biblical literalists will see this as the mark of the beast from Revelations 13:

And he causeth all, both small and great, rich and poor, free and bond, to receive a mark in their right hand, or in their foreheads:

And that no man might buy or sell, save he that had the mark, or the name of the beast, or the number of his name.

Cue the sinister music and the evil sound effects. The movie is just around the corner.

Seriously, though, there are enormous privacy, legal and other issues that our culture will have to wrestle to the ground in order for a cashless society to actually materialize, and maybe this is the time to be asking the tough questions. Clearly, Visa and Apple have their reasons, but who speaks for everybody else?

Thanks, Amy. Keep up the good work.

Major news today in the world of social networking. Google has announced their OpenSocial Alliance, a way for developers to build social applications that span more than one social network. Michael Arrington of TechCrunch calls it “a set of common APIs that application developers can use to create applications that work on any social networks (called “hosts”) that choose to participate.” Hosts include Orkut, Salesforce, LinkedIn, Ning, Hi5, Plaxo, Friendster, Viadeo and Oracle.

Now comes word that the biggest Daddy of them all, MySpace, is joining, which would make everyone except Facebook a part of the alliance. Facebook, in my judgment, will have no choice but to join. So much for the value propositions that led to its $15 billion valuation last week.

In so doing, Google has again taken the position of facilitator regarding web applications. Rather than build its own social networking application (it already has one in Okrut) to compete with Facebook, it has chosen the path of adapting to the whole web as its platform. This is so smart.

Diane Mermigas agrees:

Google’s ability to create value and seize control of reinvented markets has been at the very heart of its more than 700%-plus growth from a $4.8 billion to a $220 billion company since going public three years ago. Google’s core services and technology are so fundamental to all things interactive, it can put itself in the middle of any trend or business and blow away competitors. The combination of Google’s scale and agility, vast resources and consumer intelligence make it the $700-plus share gorilla in the media space. And its social-networking plan is just another step toward cyber-world domination.

At the end of all of this is a very big hand in the growth and development of the portable web, a term I use to describe interactive media away from desktops or laptops. Its uses are, in some ways, the same as the WWW, but in other ways, it’s quite different. It’s much more personal, interactive, and reflective of the user’s real world persona. We need to watch this space and participate with great care, because the rules are being written every day.

So what can we glean from this that will help us downstream.

1. Everything is going mobile. By talking with Verizon and Sprint, Google is setting the stage for their operating system to become the mobile standard for, well, everything except the bloody phone itself. This doesn’t have to be seen as directly competing with our efforts, because Google’s mission is not to control so much as it is to enable. I have always been impressed by how focused the company has been on this goal, and this “enabling” message is one I constantly share with local media companies.
2. The OpenSocial Alliance will marry all of these applications in such a way that it finally makes sense to join many different social networking sites. My problem with the whole social networking concept is the same with the Web as a whole — how do you keep track of so much information? By participating with Google on this, I think everybody eventually wins. Assuming alliance members allow developers access, we could see some really interesting stuff coming down the pike.
3. Privacy, I believe, will be in the hands of individual users, simply because that’s been Google’s model all along. Call me naive, but I don’t think the company’s “do no evil” slogan is just marketing. I think it’s the path to prosperity in the new world. There won’t be a need for a “Do Not Track” list, because tracking, in Google’s paradigm, doesn’t include blinking and whirling or other disruptive ad attacks so popular with Madison avenue. I’ve seen enough from Google to give them the benefit of the doubt in this one.

Interesting times, indeed.

New York Times writer Brad Stone rightly set the stage with his summary of hulu.com’s private beta launch today:

Since March, when the broadcasters announced their joint effort to bring free, ad-supported television shows to the Web, critics have pounced, predicting the venture would be doomed by diverging agendas, technical challenges and an all-powerful enemy: YouTube.

Skeptical bloggers even slapped Hulu with a derisive moniker: “Clown Co.”

Now the defense is ready to present its case.

As any viewer of “Law and Order” will tell you, the defense is often not about guilt or innocence, but about the presentation of reasonable doubt. That’s what hulu has done with its highly-controlled press presentations on this, the launch of its private beta.

The NYT header says it best: “Hulu Readies Its Online TV, Dodging the Insults.” Over at TechCrunch, one of the site’s biggest pre-launch critics, the headline is just the way hulu wants it: “Hulu Launches Private Beta, Makes Very Good First Impressions.”

Since I’ve been one of those critics — not of the presentation but of the strategy — I’ll admit that I’m naturally going to be skeptical of what I’m reading. Launching in private beta means you invite some people in to kick the tires. I’ve found nothing yet today from any such person, which means all of this positive coverage is coming from the information and screen grabs that hulu is feeding them. That said, everything looks very nice on the surface. The videos look well-organized. The player is portable, and they’re touting the ability of users to clip programs and embed those clips elsewhere. These are textbook unbundled media tactics, and they should help spread the monetized videos across the Web.

(You can view hulu vids via AOL Video. If this is the best they can do, it’s not saying much.)

There are two problems immediately. One, the videos don’t play anywhere except in the U.S. This is the result of trying to provide an application that lives by all the industry’s rules. Rights, you know. Secondly, the television shows that are offered stay online only five weeks. So think about this for a minute. Why would anybody embed a hulu clip if it couldn’t be seen in other countries and would disappear after five weeks?

The idea of a portal for “legal” videos is a good one, but 1.) all content creators must play in the same space, and 2.) the reach must parallel that of the Web itself. Hulu may work these things out eventually, but right now, those are big concerns.

Moreover, hulu further erodes the already damaged network-affiliate arrangement by making first-run show videos available after midnight, Hawaii time (nice).

In the Times article, NBCU head Jeff Zucker goes out of his way to position hulu as an entity separate from NBCU, and this will either be its greatest strength or its biggest weakness:

“At a minimum it’s another way for us to offer our content to users and get paid for it,” Mr. Zucker said. “If the site itself does well, that will be gravy on top of it.”

This distancing himself from hulu is interesting, because it was Zucker who made the original announcements and led the original cheerleading. So now hulu is just another company that’s distributing content created by NBCU, which means if it crashes and burns, it was THEIR fault. Nice.

But this isn’t what we get from NewsCorp president Peter Churnin, who takes credit for the idea in the Times article and is a bit defensive about the criticism. “I think there’s a snarky desire to say this is big dumb media and this is a big dumb joint venture,” he said, adding that he thought of the idea as a way to distribute Fox programming. So is it a joint venture or a stand-alone company?

I guess it’s both, but the question is important in judging its viability from here. If it’s a stand alone business, will it be able to sustain itself without more investment money when the costs go up? That’s a fairly significant issue. If it’s a joint venture, then NBC and NewsCorp will foot the bills, and then it becomes just bad strategy and a drain on resources.

There is one distribution partner in this that really intrigues me, and that is MySpace. If hulu is to succeed, it would help to be THE application that exposes this content to people who don’t already watch it, and that basically is the definition of MySpace’s core demos.

Stay tuned.

The online world is all atwitter with word that Microsoft won in a bid for a piece of Facebook. They beat Google on the bid, put at around $250 million for less than a 2 percent stake in the social networking site.

Rather than slithering away in defeat, I think Google is quietly smiling here. Microsoft’s purchase of such a small stake for so much money is big for Redmond, because it means Microsoft keeps their advertising deal in place with Facebook.

I’m on the record as not being a big fan of Facebook. It’s cold and impersonal, and it’s a closed network of profiles. It acts as if it was built by business people to make money, not by geeks to make users happy. Then there’s all the hype the place has gotten.

There’s also something not quite right about Facebook’s value proposition to advertisers — targeting based on private profile data. Besides, paying $250 million for less than 2 percent puts the value of Facebook at $15 billion. Sorry, I don’t buy that.

Eric Schonfeld at TechCrunch adds more:

While Google would have been a closer fit in terms of it overall philosophy (more open than not), it may have just been too expensive to buy out Microsoft from its current deal to supply ads for Facebook in the U.S. Given its deep ties with Microsoft, sticking with them was always the path of least resistance. And one could argue that Google has never felt comfortable targeting ads based on private user profile data, which seems to be the great promise of Facebook, ad-wise. Microsoft doesn’t share those qualms.

Viveck Varma Kevin Johnson of Microsoft told a press conference audience late this afternoon that the market justifies the huge valuation for Facebook. The following are notes from TechCrunch.

Online advertising is $40b/year, will grow to $80b per year. Equity stake in facebook is a strong statement of confidence in MS’ ad platform and in facebook. If you look at FB growth and think that they will get to 200 million users in future, combine that with monetization opportunity along with modest rev/user/year, the valuation is supported.

If this sounds vaguely familiar, it should. It’s called “bubblespeak,” the kind of self-deceptive hype that preceded the explosion of the first internet bubble. A lot of people think that Web 2.0 is pushing a second bubble, and if that’s the case, Facebook may well turn out to be the AOL of this one.

I actually shook my head this morning while reading a Broadcasting & Cable story in which NBC Sports head David Neal predicted that the summer Olympics in Bejing next year would move High Definition TV to mass market status.

“It will be a signature moment for the adoption of high-definition as a mainstream delivery medium for consumers,” said Neal, who predicts that over 50% of U.S. households will have an HDTV set in 2008.

Um, how do I say this nicely? How about, “I’d like some of what you’re smoking, Mr. Neal.”

First of all, statistics in this area vary widely. A Magid survey last year found HDTV in 15% of U.S. households, while a Consumer Electronics Association study puts the figure at 30% this year and projects it to be 36.5% in 2008. Since the CEA represents companies that sell the things, I think it’s a safe assumption that their numbers are, well, “forward thinking.”

I know very few people with HDTVs, mostly because I run with folks who can’t afford them. I don’t have one yet, although with all the sports we watch at my house, it’s inevitable we’ll get one. Right now, I have better uses for that $1,000, and I don’t think I’m in the minority.

But to suggest that the summer Olympics will be the event that moves HDTV adoption to 50% is, at best, wishful thinking. The economy isn’t exactly humming these days, and the digital switch for broadcasters in 2009 doesn’t require HDTV. I think prices of true HDTV sets would have to drop by half in order for Mr. Neal’s dream to come true.

For broadcasters, there’s a lot riding on HDTV, because it would mean a new closed network in which to do business. That may have been a good idea a few years ago, but I’m afraid things in the world of distributed media have overtaken that idea and that the extremely expensive push to HDTV is now problematic for many broadcasters. It’s certainly not the savior that many felt it would be a few years ago.

I don’t have any doubt that we’re headed for an HDTV world, because content choices are multiplying and the consumers who have it, love it. But this kind of rhetoric from yet another NBC executive is just hyperbole, and that has certainly reached mass market proportions.

The gallant attorneys for the RIAA have won at least a symbolic victory in their battle against music customers. The jury in the case against a Minnesota woman deliberated only for a short time before awarding the record companies over $9,000 in damages for each of the 24 songs the woman uploaded to music sharing site Kazaa. The $222,000 award won’t even pay for legal fees in the case, but that’s not the point. The RIAA won. The law rules. Don’t we all feel safer?

There are two points. One, this “victory” won’t even put a dent in people sharing music online. Two, a key ruling by the judge in the case is likely to be challenged somewhere along the line. Reporter Jeff Leeds of The New York Times called it a “hotly contested technical question,” and it was the lynchpin of the verdict itself.

…for jurors to find her liable, the record labels did not have to prove that songs on Ms. Thomas’s computer had actually been transmitted to others online. Rather, the act of making them available could be viewed as infringement, the judge ruled.

The RIAA can’t possibly be rejoicing over this, because — as the Electronic Frontier Foundation noted: “Every lawsuit makes the recording industry look more and more like King Canute, vainly trying to hold back the tide.”

We badly need copyright law to be rewritten in a way that both producers and customers can live with. Otherwise, the record industry is doomed, for suing your customers is generally not a good business practice.

I’ve been extremely lax in making blog entries lately, and the only thing I can say is that I’m absolutely swamped with stuff I get paid to do. I know. I know. Lame.

And it’s been such a great few days for material, too.

Here we find that NBCU — the guys who just can’t seem to get it right, IMO — is “quietly organizing a new council of ad agency research, strategy and media buying executives that will develop and field primary research that helps move the media marketplace forward.” I’m not sure what moving the media marketplace forward means, but the idea of this council is another example of the public masturbation that is old media responding to new.

To use my (by this time tired) analogy, this is like the whale oil industry summoning the best minds it has to come up with a plan to move whale oil forward when the whole world is moving to electricity.

The story linked above refers to this as the latest in a series of what it calls “third-party funded” research initiatives, but the third parties are all within the paradigm that’s being disrupted.

And, once again, the folks at Google close their office doors and smile.

Meanwhile, there’s this, ta-da, bulletin from the Project for Excellence in Journalism that’s best articulated in a headline reference from Romenesko: “The news looks different when non-journos select the stories.” Who knew?

Actually, this is a pretty interesting read, although nothing here will come as a surprise to regular readers here.

If a new crop of user-news sites—and measures of user activity on mainstream news sites—are any indication, the news agenda will be more diverse, more transitory, and often draw on a very different and perhaps controversial list of sources…The question of whether citizens define the news differently than professionals is becoming increasingly relevant.

Indeed, it is, and it’s ripping the foundation out from under the media elite.

Here’s a great line from a San Francisco Chronicle article on the subject:

“The traditional news outlet wants to put a lot of gravitas on their front page. They want the readers to eat their spinach,” said Kourosh Karimkhany, general manager of Wired Digital, which owns Reddit. Technology allows users to create their own news “agenda” from multiple online sources, rendering a traditional front page increasingly “irrelevant,” he said.

This is something the folks in traditional media simply cannot bring themselves to accept about the path of new media. To accept would be to reject the model that’s sustained the industry for the last century, but to do otherwise is the path to the tarpits. Not an easy choice.

Meanwhile, Jack Feuer writes a heartfelt piece reflecting back on 9/11 that contains a graph that bears response:

We are inundated with media choices that seduce us with entertainment, ply us with information, supply use with endless ways to push-pull, opt-in, interact and network. We call it a revolution. But it’s not. The options are just choices. The channels are just toys. It doesn’t matter if we’re five, 15 or 75. When we are threatened, when the world goes mad, when we are desperate to connect, we don’t log on to MySpace. We turn on the television.

This is certainly true, but there are a couple of caveats. One, we can “watch” live coverage of events on our computers today in ways that we couldn’t six years ago. Two, blockbuster news events aren’t everyday fare, and attempts to elevate “regular” news to blockbuster status are what’s wrong with the whole 24/7 news channel concept. These events cost money instead of making it, because advertising is the first thing to go. The problem for television isn’t real breaking news. It’s what happens when the break is over.

Meanwhile, Bob Garfield (of NPR fame) shares his chilling account of dealing with Comcast as a consumer. This is really a good read.

Finally, somebody has finally sued AT&T(Cingular) for the ridiculous claim that they have fewer dropped calls than anybody else.

Back to the grind. Aloha.

As NBCU flops around like a gasping fish on a dock, Steve Jobs is in front of reporters showing the fancy new iPods that could’ve played all those programs the struggling network decided to pull in a spat over control of pricing.

And here’s a great quote from the conclusions of Accenture’s new Global Content Study 2007 (referenced below). Bear in mind that this is the number one recommendation under “Increase Reach:”

Proactively ensure content is available where users look for it, or to put it more bluntly — don’t be prissy about where people consume your content.

Yeah, NBCU. Stop being so prissy.

I’ve been going over Accenture’s new Global Content Study 2007, and there’s some pretty good stuff here. I recommend you download the thing and have your own lookie-loo.

Accenture interviewed more than 100 leaders and decision-makers in the media and entertainment sectors…to gauge their views of where the greatest opportunities and challenges will come over the next five years. The study, called Beyond the Hype: How New Content and Technology are Redefining the Future of Media, provides, among others, these major findings:

• 62% of executives look to “new platforms as being the most important key to growth…
• 53% of executives surveyed indicated that “short form content” offered the largest opportunity for “new content”…
• Asked what they believed was a top threat to the business, over half of the executives (57%) identified “consumer-based competition” or “user-generated” content…
• Critically important is the need for digital readiness and a future technology road map…

I’m especially impressed that these “leaders” view “consumer-based competition” as a threat, because that’s exactly what they need to be considering. Accenture is a big name in the business consulting world, and it’s interesting to see them picking up on things that we’ve been talking about here for years.

Still, this report also reveals some problems on the road to the future. These are found in quotes from various participants. While most of the quotes used are spot-on, a couple left me gasping.

“We will look to the user side and learn from the YouTubes and the MySpaces who are training consumers in media usage. We will look at their experience and leverage it.” Executive, Reed Publishing

This kind of thinking always amuses me. “Leverage” is business-speak for borrowing (taking) a little to make a lot. It’s condescending, to say the least, and I would argue that the “training” of consumers that’s taking place on these sites can’t be leveraged in any way that supports a mass marketing paradigm. Here’s another gem:

“One of the things I think amateur user-generated content is most likely to do is to generate new respect for the outstanding creative professionals in our industry, who can tell a truly great story.” Henry Schleiff, CEO, Hallmark Channel

Here, Henry is telling us that great content will glow amidst all the crap that is user-generated content, and I have mixed feelings about that. Good storytelling always rises to the top, but that presumes certain subjective standards in what is or isn’t good. I mean, I didn’t like what we used to call the “MTV style” of video, where the camera moves around a lot. That’s pretty much a standard these days, so who’s to say that one set of standards is “better” than another?

Yes, we are going through tremendous change, and I agree with Accenture’s conclusion that the changes confronting us today are “akin to the changes witnessed with the invention of Gutenberg’s printing press in 1450 or Marconi’s transatlantic broadcast in 1902.” The media powers in those days had similar reactions, and while we’re all out here trying to project where things are going, the truth is nobody really knows.

But isn’t that what makes it exciting?

TechCrunch provided a link this weekend to Vision 20/20, a nice mash-up site that provides users with a free map showing where sex offenders live in their neighborhoods. Just click on POM Offender Locator in the top navigation and enter your address. It’s pretty freaky, a nice public service, and an excellent demonstration of what you can do with databases and maps to create meaningful content.

Which got me to thinking…

NBC is continuing with its controversial “To Catch A Predator” series despite advertisers pulling out of the “show.” My heart bleeds for NBC, so why don’t they visit the Vision 20/20 website, find offenders living in the hood, and have pretend youngsters knock on the door with Girl Scout cookies? The cookie box cam video alone would be priceless. They could call it “To Catch a Repeat Predator,” and with his brow appropriately furrowed, Chris Hansen could ask them, “Don’t you know you can’t do this?.”

Noble, huh?

The telephone has become useless for interacting with businesses. Actually, it happened a long time ago, when companies (and governments) decided they could save money (rather than serve customers) by installing ridiculous answering technologies, including those where you have to actually speak with a machine! And who programs these things anyway? Who decides what should be on what menu and that pressing zero gets you no where?

It’s especially “fun” with utility companies, who route you through an endless array of choices, each time requiring that you enter some numbers, “so I can access your account.” This would be fine, if that information was then passed from menu to menu, but it isn’t. When you (finally) get to the point where the machine actually lets you talk to a human being (term used loosely), you have to repeat the same damned information.

Then, after bouncing around for 15 minutes, you’re placed in the queue “to speak with a customer service agent,” only to be told that your wait will be 10 minutes, during which time you’re forced to listen to marketing messages (unwanted, but is there any other kind?) and the most God awful music ever licensed for public use.

And here’s what really galls me. Once you’ve successfully navigated the mine field, the guy at the other end doesn’t speak English! Well, in HIS country, they may call it English, but to me, it’s just gobbledygook.

Verizon now has immediate online chat, which I’m convinced is the way we’ll all be dealing with businesses in the future. The telephone is terribly convenient, but only if both sides think it’s so. Because if the one end of the line considers it a nuisance, it’s that way for everybody.

Online chat’s also better, because it’s easier to understand misspelled words than those mispronounced.

So put a fork in telephones; they’re done! One day, our museums will show phones to be an archaic way that consumers and businesses used to speak with each other. The sign will say, “The Telephone: A 20th Century communications mechanism designed to connect people with each other and the institutions that served them. Rendered irrelevant as a business tool in the early 21st Century, because the cost of speaking with customers outweighed the need.”

I really like what Gannett is doing with its online properties in the launch of 100 mobile sites. I especially like the identifier “m” used in front of the domain name as a way of finding the sites. It’s such a good idea that I hope others pick it up.

Basically, they’re creating subdomains using the letter “m” as a way of linking into content that’s been streamlined for mobile use. For example, USATODAY’s mobile URL is http://m.usatoday.com. How simple is that? I tried it, and it delivers as advertised.

The mobile web needs some form of standardization, and I think this is a good first step. Kudos to Gannett.

I’ve been following the development of WiMAX for a long time, so news this week that Sprint has added Google to its team to make a WiMAX network available next year got my attention. Never underestimate Google, folks. I think this is a major development in the growth of 2-way, wireless video communications, to say nothing of what it will mean for data.

Let’s back up a minute. WiMAX is a high speed wireless technology with 30 times the speed of any 3G wireless network and with a reach of over 30 miles. Think WiFi on steroids. Sprint and Nextel began building a network in 2004. That same year, Intel began producing computer chips with WiMAX built in. A lot of people raised a leery eyebrow at the time, because we don’t even have a valid 3G network in this country, so why build one that’s essentially fourth-generation?

Enter our wise old friend, Google. According to a report in Online Media Daily, Google and Sprint are building a portal specifically for this network.

In the as-yet unnamed portal, Sprint’s high-speed wireless service (which includes location detection) will be combined with Google Apps (including e-mail, chat and calendaring), allowing consumers to browse the Web, buy products on-demand, and stream media on devices ranging from laptops and PDAs to phones and music players.

“This is a play to get Internet access in a very broadband way through a number of different devices,” said Peter Cannistra, director of Sprint’s mobile broadband business. “WiMAX is being built out for laptops and fixed computers, but we’re working to put the chips into wide array of consumer electronics.”

The report adds that Sprint will do a beta rollout of the service (including Google Apps) in Chicago, Baltimore and Washington, DC by the end of this year, with more widespread service available by April of 2008.

I believe this will accelerate the disruption that’s dismantling the media ecosystem in the U.S. and place greater emphasis on mobile, direct marketing. The network contains “location detection,” for crying out loud. Talk about a gold mine for advertisers!

It’s also fascinating at a time when the news is filled with stories about the FCC’s auction of broadcast spectrum. WiMAX is a bird-in-the-hand for Sprint and now Google, so the only question is when will AT&T buy Sprint, so that the iPhone will work better?

(I know. I know. Shut up, Terry!)

Once upon a time, a small church in rural Pennsylvania got a new pastor, and everybody was excited. The nice-looking young man brought smiles to the faces of the blue-haired ladies, and his first sermon was on love. “Wonderful,” the congregation agreed as they exited the church afterwards. “Thank you so much. Pastor.”

The next week, everybody was a little surprised when the new pastor spoke again about love. Week after week, the sermons began to all sound the same, and one woman couldn’t contain herself as she took the pastor’s hand after the service. “Pastor,” she said, “why do you keep preaching about love? What about sin? What about right living?”

The pastor answered with a smile, “When I believe the congregation fully understands this topic, I’ll move on to something else.”

I feel that way sometimes, as new versions of old themes keep popping up across the media landscape.

Umair Haque, the brilliant London Business School economist that I’ve written about so many times, writes today of new investment in Twitter, the cool text-messaging application without a business model. Why would anybody sink real dollars in a business that has no business?

This is where the old theme comes in. I’ll state it, and let Umair expand. The disruption of Media 2.0 is, at core, a disruption of mass marketing. Hence, “new media” applications built on a mass marketing foundation are not part of the disruption.

This approach - an almost disturbing lack of interest in the business plan/model/etc - is something all of today’s great media investors have.

…When an industry requires total economic reinvention - new assets, capabilities, revenue streams, market space, the whole nine yards - it’s futile to stick to the sterile nostrums of a printed “business plan”.

This should be intuitive. Total economic reinvention implies almost perfect uncertainty. Under conditions of perfect uncertainty, it’s a suckers bet to put faith in rigid plans.

Now, this isn’t to say that you should descend into irrational exuberance, and forget about value creation and value capture altogether.

Rather, what counts is the ability to tap (better yet, create) many different kinds of revenue streams, offsetting the systematic risk of investing in the space in the first place.

…There’s little strategic point in focusing no how, for example, to grow a next-gen media business to $50m in revenues or how much $$$ ad nets make if it’s the larger economics of the industry which are in an almost total state of flux, because the new value chain hasn’t yet emerged.

Put another way, too often, these kinds of elaborate analyses built on fixed assumption have a very steep opportunity cost in industries where resources, competencies, revenues streams, business models, etc are exactly what are undergoing seismic shifts - they blind us with illusions that fixed cells in spreadsheets are strategy.

Spreadsheets aren’t strategy.

Rather, next-gen investors are better off understanding why and how value creation and value capture will shift over the next 2-5 years - and then invest in plays which can dominate those shifts.

Numbers are important - sure. But it’s understanding the deeper economic logic which really counts.

“Spreadsheets aren’t strategy.” Brilliant!

This is precisely why I tell people that you can’t left-brain your way into right-brain thinking and why I have so little faith in the conclusions of the NewspaperNext project. “Innovative” solutions, it concludes, begin with the spreadsheet about which Umair speaks, and that’s as problematic for media companies trying to reinvent themselves as it is for investors.

This is why Simulpath™ is so crucial to understand and why we must throw off the burden of tying everything we do today to a revenue stream. It’s not blind faith; it’s a deep understanding that the revenue runway for a lot of this has to be a long one, which is why Media 2.0 is best viewed as an investment.

And for me, this is a vital aspect of my work, because my passion lies with positioning local media companies for tomorrow. If we can bring ourselves to get in sync with the disruption, we’ll be far ahead of our local competitors, but that means thinking like motivated and informed new media investors.

This is a worthwhile read, not because it rips the iPhone, but because Shelly has such a nice way of telling it like it is. And the way Shelly sees it, the iPhone isn’t ready for business use, and he provides 13 good reasons why.

Should you buy one? If you want to be the coolest kid on your block, sure. If you are happy with AT&T/Cingular as a wireless provider, sure. If you are willing to carry an additional cell phone to make important calls, sure. If you are seeking knowledge about the future of personal communications and want to “see for yourself,” sure. Otherwise, I’d wait for at least one, if not two, generations. iLove my iPhone. I truly do. It’s just not suitable for the purpose for which it was designed. This may sound negative, but it’s not. We all own many beautiful things that don’t really do much. My iPhone is techno-art and I’m happy to have it.

I didn’t buy an iPhone, and I’m enjoying the conversations with the folks at my Verizon store about various iPhone issues and about how the Apple “phone” has lit a fire beneath the butts of LG, Motorola and other providers to offer similar services. Stay tuned.

The FCC’s 700 MHz spectrum auction got a little more interesting last week when Google told the world they would bid a minimum of $4.6 billion provided certain conditions were met. This is a very important move that could actually help the people who “lost” the spectrum in the first place - broadcasters.

Before I get into this, a disclaimer: I’m not a spectrum expert, but I have a pretty good bullshit detector. I’ve also commented for years about how Europe and Asia are beating the crap out of us in applications of third-generation cellphone technologies and broadband networks. You need to look no further than our beloved incumbents in the telecom industry to assign blame for that, and these are the same folks who want and need that spectrum to maintain their grip on certain forms of communication. Every claim by anyone in this debate, therefore, is self-serving, with the exception of the small group of voices pushing for open access.

As I reported a couple of weeks ago, FCC Chairman Kevin Martin’s idea of open access really isn’t open at all, but Google’s proposal is. In a truly open broadband network, anybody could play. In the incumbent’s view — and in that of several other entities involved in the auction — they would determine who could play based upon how much money would be involved. This is the same closed-network concept that has driven our wireless systems to the competitive basement worldwide.

If Google is successful, however, broadcast companies will have much more flexibility in creating business models that use spectrum that used to belong to them in the first place. The irony of this is stunning.

For the uneducated about the whole spectrum matter, here’s a nice primer from Om Malik a few months ago. Om provides a 10-step explanation, what he calls “a little cheat sheet.” It’s a good read.

And regarding the Google bid, Michael Arrington at TechCrunch has a terrific summary that includes the four conditions that Google is “recommending.”

1. Open applications: Consumers should be able to download and utilize any software applications, content, or services they desire;
2. Open devices: Consumers should be able to utilize a handheld communications device with whatever wireless network they prefer;
3. Open services: Third parties (resellers) should be able to acquire wireless services from a 700 MHz licensee on a wholesale basis, based on reasonably nondiscriminatory commercial terms; and
4. Open networks: Third parties (like internet service providers) should be able to interconnect at any technically feasible point in a 700 MHz licensee’s wireless network.

But the Arrington piece nails the BS in the incumbents’ response:

AT&T’s response to Google’s letter was breathtaking in its audacity:

Not satisfied with a compromise proposal from Chairman Martin that meets most of its conditions, Google has now delivered an all or nothing ultimatum to the U.S. Government, insisting that every single one of their conditions “must” be met or they will not participate in the spectrum auction. Google is demanding the Government stack the deck in its favor, limit competing bids, and effectively force wireless carriers to alter their business models to Google’s liking. We would repeat that Google should put up or shut up–they can bid and enter the wireless market with any business model they prefer, then let consumers decide which model they like best.

For anyone who doesn’t look too closely at the issue, AT&T’s response seems very reasonable: keep government regulation out of the spectrum let the market decide which services win. But that isn’t really what would happen at all. If fewer government restrictions are placed on the bandwidth the auction winners will be able to extract more profits at the expense of competitors and consumers. So naturally they don’t want to see open access rules like those recommended by Google. The incumbents also don’t want to see Google play in their sandbox and bidding against them - so they have yet another reason to oppose their proposal.

As the leader in the open internet world, Google stands to benefit in a purely open wireless world, but so will we all. Big or small, a level field of play will mean an explosion of creativity and applications that we can’t even imagine today. Just look at what has taken place in the 802.11 spectrum (Wi-Fi) since the FCC made that truly open. From your cordless phone to your home wireless network to hotspots in various public and private locations, all are there using “free” spectrum.

This is an enormous political minefield for Washington with billions of dollars at stake. Thankfully, a lot of extremely well-informed people are paying attention on behalf of the (relatively) shallow pocket folks in the country.

Here is a link to the latest in my ongoing series of essays, TV News in a Postmodern World. This one is called “Niche Media is the Future,” and it examines the drift to specialization in news coverage that’s a big part of what J.D. Lasica calls the personal media revolution. I use coverage of Paris Hilton to make a point that I think is vital for us to understand in the midst of sea changes in media and in journalism.

The era of the all-things-to-everybody news organization is drawing to a close, because specialty coverage can do a better job of delivering depth. Aggregators bring this to us in every size and shape imaginable, and so the challenge to local media companies is which niches in your market do you want to own? Move now, because eventually, forces within your own community will seize those niches, if you don’t.

…make a radar widget that taps the NWS database? I want it on my iGoogle page.

You have sent a clear message that you are taking on your customers by this new set of rules for online media coverage, and it’s a foolish and dangerous proposition. You’ll argue, of course, that this is about media companies profiting from that which belongs to you and not about your customers, but that’s not the case. You are limiting the choice of fans, and that’s a big problem for you.

Here’s why. The assumption you’re making is that if anybody wants access to your world, they must come through you. This is contrary to the cultural disruption that’s underway, and I think you’re underestimating it. If you really want an unbundled strategy, then make all plays available a la carte with an embeddable player. I mean, who gives a crap about whether somebody runs 45-seconds or 45-minutes of “your” content, as long as it comes from you and contains your marketing?

Moreover, a second assumption is that if media companies want access to your fans, they’ll also have to come through you. This is probably the bigger of the two assumptions, because you believe that limiting access to eyeballs has value. This is called scarcity economics, and it just doesn’t work online.

For one, your copyright, like everyone’s, is subject to the rules of fair use, and you will have to defend that some day and lose. Secondly, and perhaps more importantly, it has already been proven that your fans participate in fantasy leagues that are not of your making. Are you going to tell your fans that they can’t use “your” players, names and images in playing fantasy football?

I suppose you might.

The upfront is underway and this is announcement week. Nothing really surprising so far — a lot of stuff about multimedia advertising. But this caught my eye. It’s from a Media Daily News article on ABC’s delivery of “HD quality” video through its streaming player.

It represents another signal that ABC no longer views television as content sent in a linear pattern through a living-room screen. For advertisers, the initiative and new player will allow for geo-targeting of ads (emphasis mine). Creative can be localized and targeted to individual users.

If a television network can geo-target ads, they are actually competing in the local media space.

Ouch! That hurts.