Wednesday, December 3, 2008

IN THIS ISSUE:

MUMBAI ATTACKS: TWITTER GETS ITS MOMENT
POTENTIAL NEW WEB CHAPTER BEGINS TODAY WITH .TEL DOMAINS
60-SECOND CASE STUDY: NY TIMES FACEBOOK AD CAMPAIGN
TRADING ANALOG DOLLARS FOR DIGITAL PENNIES
THE RIAA’S EXTORTION TACTICS WILL END BADLY FOR THE MUSIC INDUSTRY

MUMBAI ATTACKS: TWITTER GETS ITS MOMENT (Steve)
The first reaction of any established media is to scoff at a newly-developed media. Radio and film mocked television. News mocked the Web. And now bloggers (and, seemingly all of the aforementioned) are mocking Twitter. Yet, during the Mumbai massacre, it was Twitter where people in the midst of the attacks sent their instant observations. And, almost as fast as those 140 character “tweets” were pouring in, so too were the criticisms.

At the height of the attacks, about 80 messages were being sent every five seconds. Many were “retweets” of other people’s information. Others were from witnesses, including many attached to pictures from the ground. The information flow was messy, to say the least. But it was real. It was the chaos and the conversation. It was the fog of war. You couldn’t possibly keep up with it or try to draw a conclusion based upon one or two tweets.

Mumbai tweet

But this misses one of the many points of this service. About 150 people subscribe to my Twitter stream (steviesaf). Suppose I had been in Mumbai. Suppose I were trapped in the hotel. If I sent a message “Trapped in hotel, but safe for now” my family and friends would know my status. That’s breaking news to my friends. It’s micronews.

Mumbai tweet

(You can see all the Mumbai tweets by doing a search at Twitter for #mumbai.)

Mumbai tweet

So there was good information. And there was misinformation. And there were truths and half truths. Most of the Tweets were simply directing people to traditional media sources. But here’s the thing: Twitter is not a traditional news outlet. It is a witness. It is a source. It is a social network. It’s not like blogging and it’s not like a newspaper. But the news can’t resist comparing itself to Twitter, and guess which format it prefers?

Tim Malbon and the blog by the digital consulting company “Made By Many” wrote:

“Having looked around elsewhere, my initial reaction was that the main old-school news agencies like Reuters, CNN and the BBC just weren’t providing the coverage, in contrast to the truly MASSIVE volume of tweeting going on. But as the evening continued my feelings changed about this, and I started to see and ugly side to Twitter, far from being a crowd-sourced version of the news it was actually an incoherent, rumour-fueled mob operating in a mad echo chamber of tweets, re-tweets and re-re-tweets. During the hour or so I followed on Twitter there were wildly differing estimates of the numbers killed and injured — ranging up to 1,000.”

Then, Malbon — a blogger mind you — writes:

“If traditional media agencies behaved like this (openly) they’d find themselves in trouble — but no-one regulates the mob and it answers to no-one.”

Just like a real mob. There was more handwringing, especially over an unsubstantiated posting that the Indian government was asking people to stop Twittering for fear it was helping the terrorists. The BBC even reported this as news, getting it directly off Twitter. Nobody confirmed it. Nobody has still confirmed it. So it was up to the always intrepid media consultant Amy Gahran to look into it.

A simple Twitter search for “please stop tweeting” showed the earliest occurrence of this phrase in connection to the Mumbai attacks came from the MumbaiUpdates account, which appears to be run by a Twitter user named Mark Bao — a high school junior based in Boston, who apparently is not in Mumbai at the moment.

Bao just e‑mailed me to let me know that his tweet was not the original report on this event. Here’s what he said:

The rumour started on via another twitter post that retweeted from another person that was a trusted source IN Mumbai. Later, it was confirmed on video that the police wanted live updates of the operations to be stopped, though they did not mention the hashtag #Mumbai, though they asked media outlets to stop reporting live.

There you have it. Amy did a Twitter search, emailed a guy, and found out the whole thing was a rumor. Maybe it was true, maybe it wasn’t. Certainly it wasn’t enough to go on. Certainly, it wasn’t even close for BBC material. So who is to blame for reporting this? Twitter users — or the media who didn’t bother to do the 10 minutes worth of work that could have confirmed this?

At Tom’s Tech Blog, Tom — an IT professional — makes this shocking statement -

I’m sorry but it really makes me angry. What you have here are people who simply don’t care if they get the news right. They’re turning the most dire of situations into entertainment by using Twitter to “be involved in the story.” They throw their little tweets out not caring who they scare half to death and then brag about how great Twitter is for “beating the mainstream media at reporting the news. Honestly, I’m tempted to say it should be a crime what some of these people are doing.

Inaccurate reporting should be a crime? Sure, there were inaccurate reports. 1,000 dead? No. But I recall CNN reporting that as many as 10,000 people could be dead on the morning of 9/11. I recall a report that morning that the State Department had been bombed. I recall plenty of reports that later turned out to be false. That’s what happens in a massive news event. Should we send all the reporters to jail?

Equally as silly, however, is the gloating in the tweetosphere (or whatever we should call it) that it somehow “beat” CNN or what have you. This isn’t a contest. Early reports come in from all sorts of sources. The newsgathering public isn’t keeping score. The Vs. Thinking only makes things worse. It doesn’t contribute to thinking about how much this is shifting and how we need to work together.   Link>

»>

POTENTIAL NEW WEB CHAPTER BEGINS TODAY WITH .TEL DOMAINS (Terry)
The new .tel domains go on sale today for those businesses with a registered trademark or service mark. The .tel domain doesn’t function like other top level domains (TLD), because its use doesn’t point to a website but a place in what is hoped will be THE online directory. Web users will type your .tel URL into the address bar and be taken to a page that lists every conceivable form of contact for your company. You’ll be able to adjust or update your URL any time you wish and also associate keywords to it. Its real intent is for use by the Mobile Web, because the information loads quickly and easily.

the new dot-tel domain

David Silverman of the Broadcast Law Blog writes that “broadcasters and other media companies will want to protect URLs that include their call signs, unique slogans and positioning statements or other registered marks or names.”

The theory behind the .tel TLD is to allow instant access to contact information without having to access a registrant’s website. When contact information is accessed via mobile devices, the telephone numbers will appear as “hot links” that will dial those numbers upon touch or selection. Of course, links to websites may also be provided, but the primary purpose of the TLD is to provide a global contact directory without the need for the user to have Outlook or other address books or for the registrant to have a website.

ICANN, the global organization that oversees TLDs, has opened what’s called the “Sunrise” period for registering this domain beginning today. Only those who hold registered trademarks may purchase domains during this period. The next phase, labeled “Landrush,” begins February 3, 2009, and will be open to anyone who didn’t purchase a domain during the Sunrise phase. On March 24, 2009, Open Registration begins. The difference between each of these is the price you’ll have to pay. Sunrise purchases are estimated to be in the $400 range, depending on the purchase source. Landrush is estimated to be $150 per domain and $20 during the Open Registration phase.

Silverman urges broadcasters to buy now.

There is a growing sense that .tel names will be in great demand and that it may pay to protect your intellectual property by registering it in a .tel domain name before someone else beats you to it. Look into this prospect now!

The possibilities of this domain are infinite, and it’s wise to heed Silverman’s advice. Like everything else web-related, however, the .tel domain has its detractors who view it as “just another attempt by ICANN to create something we don’t need.” While I’m certain the yellow pages folks and anybody else with a directory won’t be big fans of this, the truth is it will be awhile before the concept is viable anyway. The big plus for the .tel domain is that individuals will be able to buy domains beginning in February, and that’ll be the game-changer. The domain allows you to store every form of contact that you have, including phone numbers, email addresses, personal pages like MySpace and Facebook, employer, etc. If we are ever to become the networked culture that most see downstream, this domain will help make that happen.

Network Solutions describes it this way:

Manage and publish all of your contact information in one place, such as:

  • Create your permanent online business card
  • Expand your ability to communicate and reach your customers
  • Become accessible from any device connected to the Internet in just one click
  • Compliment your current Web site with complete contact page
  • Gain entry into a new global online directory
  • Easy site updates that take effect in minutes
  • Ensure your most important information is easily accessible and always up-to-date.

Spam is a concern to some, because the information will be so accessible. However, I wouldn’t let that stop me from reserving my trademarked domains as soon as possible.   Link>

»>

60-SECOND CASE STUDY: NY TIMES FACEBOOK AD CAMPAIGN (Steve)
The Times Facebook pageWe’ve suggested before about the power of advertising on social media networks. Here’s some proof why.

On the day after the election, The New York Times purchased ad space on the front of Facebook, along with an interactive question (“What should Barack Obama do as his first post-inauguration action?”). In addition, Facebookers could “gift” each other a virtual copy of the Times’ front page from November 5th, with the headline “Obama Wins.”

Was it a success? An internal memo from New York Times President Scott Heekin-Canedy positively gushes:

The Times ad on Facebook“From our perspective, the (campaign) was a great success, garnering us 4.3 times the value of our spend. We reached 68.3 million individuals with our brand message. We increased our number of fans more than three times in just 24 hours — from 49,000 to 164,000 — and in the process far exceeded our 2008 goal of 100,000 fans. And we engaged the Facebook community in a lively conversation (more than 34,000 comments shared) on which issues are most important for the President-elect. More than 400,000 New York Times “gifts” were given by Facebook users to their friends. Possibly the greatest success of this campaign, however, is that our fans continue to rapidly grow (181,000+ fans as of November 19 ) into a powerful, free word-of-mouth network that we will leverage for future marketing messages.”

68 million people got the brand message. That’s about three times the audience of a top-rated TV show these days. 100,000 people actively signed on to “friend” Facebook, effectively volunteering to get future marketing messages. The Times was at the center of the Obama conversation on Facebook the day after the election. Good investment.   Link>

»>

REMEMBER, IT’S ALL ABOUT ADVERTISING (Terry)
The hidden message in Steve’s story above about The Times and Facebook is that advertisers are using Facebook in the same way the paper did, and this is a real problem for media companies. As we’ve reported many times in this newsletter, all of the tools of personal media apply to advertisers, too, so the discovery by The New York Times that spending money on Facebook got them 4.3 times the value of their spend is the same discovery being made by a growing number of advertisers as well.

Everything about our world is changing, and few people understand this better than the venture capitalists who are funding the disruption of the Web. High on that list is Fred Wilson, a partner in Union Square Ventures in New York and one of the most respected voices in new media. Fred views the media world from within the disruption, and his perspective is valuable for everybody. With his permission, we’re republishing an article of Fred’s about broadcasting that contains some important thoughts:

TRADING ANALOG DOLLARS FOR DIGITAL PENNIES (Fred Wilson)
Jeff Zucker, head of NBC Universal, was famously quoted earlier this year warning that the media industry had to work so “that we do not end up trading analog dollars for digital pennies.”

It’s a great line and an even better observation. But I think it’s inevitable and it’s going to happen no matter how hard they try to avoid it.

Analog and digital, it turns out, are polar opposites. Analog has physical costs which lead to scarcity driven business models. Digital has zero marginal cost (or near zero) which leads to ubiquity driven business models.

In the world that Jeff grew up in, a studio created a TV show, let’s say Friends, and then a network bought the show and ran it once a week at a scheduled time where millions of people would make time, all at the same time, to watch it. That drove high CPMs and a great business model.

In the world we live in now, it’s completely different. Jeff’s network produced a hilarious SNL skit but did not air it last weekend. The skit featured Andy Samberg as Rahm Emanuel, and NBC has made it available via it’s JV with News Corp, Hulu. I watched early last week on Hulu. And since then, I’ve shown it (physically shown it) to at least a dozen people at various places and times, including last night at a friend’s house on his friend’s laptop. Hulu doesn’t show how many views this skit got, but Samberg’s Lazy Sunday clip was viewed over 5mm times before NBC had it pulled from YouTube and put it up on SNL’s website. That experience certainly was formative in the creation of Hulu.

The ability to watch a TV show or TV clip anytime anyplace is naturally going to lead to a lot more viewers than any individual show can get in the traditional TV viewing approach. The biggest weekly TV shows get around 20mm viewers. YouTube has over 300mm monthly visitors according to comScore. Hulu is just getting started, but if it ever goes international (and I sure hope it does and soon), then it will eventually reach similar numbers of viewers.

The fact is there is so much internet inventory, particularly when you count the various social networks cropping up all over the world, that the $20 CPM may be a thing of the past. I know that some Internet inventory is sold at prices above $20 CPM, in fact some banners have even been sold on this blog at those kinds of prices. But I don’t think those prices are sustainable.

The Economist has an article running this week about online advertising (where I was reminded of the Jeff Zucker quote) that suggests that online advertising will be unscathed during the downturn. The article quotes a report by eMarketer that suggests online advertising will continue to grow at good clip next year:

eMarketer, a market-research firm, predicted that online-advertising spending in America, which makes up about half the global total, will increase by 8.9% in 2009, rather than the 14.5% it had forecast in August. The firm thinks search advertising will grow by 14.9% and rich-media ads by 7.5%, whereas display ads will grow by 6.6%. In short, online advertising will continue to expand in the recession—just not as quickly as previously expected.

I hope eMarketer is right but even if they are not, this downturn will accelerate the conversion of analog dollars to digital pennies because you can buy online inventory for a fraction of the cost of analog inventory, you can target it, you can measure it, and you can even create your own media if you want. And you can do this at a scale that traditional media can never create with its scarcity driven orientation.

That’s it for now. I am going hunting for a few digital pennies now.   Link>

»>

THE RIAA’S EXTORTION TACTICS WILL END BADLY FOR THE MUSIC INDUSTRY (Terry)
It’s been awhile since I wrote about this topic, and a lot has happened between now and then. To review, the record industry long ago made a decision to sue its customers in a useless attempt to halt illegal downloading of digital music clips. The only people gaining in this are the lawyers that the RIAA has employed, for it has done nothing except create wave after wave of bad feelings towards an industry that people used to respect.

Since the industry began this tactic, we’ve seen digital sales actually bring about revenue increases for some record labels. Universal Music Group reported last month that revenue from digital sales was up 33 percent in the first nine months of 2008 and that, combined with merchandising and licensing, “more than offset lower physical sales,” according to parent group Vivendi’s earnings (via PaidContent.org). Nevertheless, the industry presses forward with suing customers.

Ciara SauroThe latest victim is a 19-year old woman from Pittsburgh, Ciara Sauro, who is disabled from pancreatitis, needs an islet cell transplant and is hospitalized weekly. She lives with her single mother, who earns minimum wage. When the RIAA sued, Sauro and her mother didn’t have money to make a defense, so a Federal Judge ruled her guilty in absentia and imposed an $8000 fine. She told WTAE-TV in Pittsburgh that she never made the downloads.

“I already have severe depression. I mean, it’s so hard to sit there and think that I have to get in trouble for something that I didn’t do. It’s not fair,” Sauro said.

Sauro and her mother, Lisa, are being sued for the fines because they didn’t challenge a music industry lawsuit in Pittsburgh federal court.

The lawsuit accuses Ciara Sauro of illegally sharing 10 songs online with strangers through free Internet software.

“You want to know the truth? I make $8.25 an hour. She can’t work. This child is very sick. I mean, what am I supposed to do?” Lisa Sauro said.

Pittsburgh attorney James Brink has volunteered to help the Sauros and ask the judge to reopen the case.

Meanwhile, the case represents perfectly the cold-blooded absurdity of the RIAA’s actions and adds fuel for those seeking to stop it altogether. The founder of Harvard’s Berkman Center for Internet & Society, Charles Nesson, has filed a countersuit on behalf of Joel Tenenbaum, a Boston University graduate student also being sued by the RIAA. David Weinberger, a Berkman fellow, interviewed Nesson and Tenenbaum, which has been published as a podcast.

Charlie’s analogy is to Congress passing a law that charges $750-$150,000 for each mile we go over the speed limit, and then allows a private company to fund itself by enforcing the law, and allows them to take bribes (“settlements”). He says the RIAA is using the federal courts as a collection agency. If the law is a criminal statute, which Charlie argues it in effect is, then private parties should not be able to pursue civil suits to enforce it.

If Charlie and Joel win, it would shut down the RIAA’s hyper-aggressive tactics. And, although Charlie does not say this, it seems to me that it might open up some interesting class action suits from those who have had to pay up.

I can’t see any of this ending well for the record industry, but apparently the industry don’t care about its reputation going forward. The record companies are caught in a trap of their own making, for if they were to stop this process, it would open them up to questions — and as David suggests, lawsuits — about why they did it in the first place.

And, of course, the irony of the whole thing is that digital downloads are beginning to replace CDs as the cash cows for the record companies, which they claimed would never happen back in the early days of the digital disruption.   Link>

»>

QUOTE OF THE WEEK
While dim reports on the state of retail are all the rage, if analysts and the media continue to spin the doom and gloom, they will only become a self-fulfilling prophecy. Shelly Palmer.