Just 2 Youtube videos, but both rather wonderful in their own way.
The first one tells the story of how we, nowadays, maintain a level of consistency in our concept of weights and measures with, of all things, the world’s roundest object. I really really want to get to hold it, which considering it is literally priceless is never going to happen. I can live with that, even though you can see how excited the guy in the video is. Lucky bugger.
I have a much better chance of getting my hands on the subject of the 2nd video, which is a leave me alone box, also known as a useless machine. This is perhaps as close to mechanical whimsy as you could find. There are a lot of videos of leave me alone boxes on Youtube but this is the one I like, it’s not trying too hard. A simple piece of humour executed simply.
The reason for this series of essays is to explore the problem of remunerating content creators in a world where the most powerful and ubiquitous modern infrastructure (computing) has become massively decentralised and deeply personal, but also utterly essential to the very functioning of modern society.
Problematically for some, computers are also, by design, huge copying machines.
There is no way around this. Modern general purpose computing is built on an architecture that has to be able to copy data, and everything we consume on a computer is data. To take away this function is to reduce computers to simple appliances with limited functionality, which in turn dramatically reduces their value to you personally and to society.
I have argued (part 1, part 2) that each change in audio visual content distribution technology has introduced a new category of content, and a new (or several new) monetisation channels. Among many other changes these particular ones incentivise 2 things.
First they force the owners of the new distribution technology to become content producers themselves and then, secondly, subsequently and consequentially, the new technology owners align their business needs with the existing incumbent businesses. This alignment of need helps create a smooth introduction, for the new tech, and reduces tension between substantial business lobbies.
As such, previous disruption in this space, heralded by technology changes have been relatively friendly affairs. This time it is different.
- The new content style, introduced by this round of technology is a mixture of user generated content (UGC), ‘reality’ real time programming and higher quality productions that have decentralised production. All of these ‘new’ content styles are executed by a significantly larger caucus than ever before. Decentralisation is never welcomed by businesses built on a centralised position of control.
- The new paradigm has not introduced a new monetisation channel (yet). Worse, it has in fact gone the other way and taken away monetisation mechanics (geographic pricing and staggered release), while introducing high levels of uncertainty into business planning due to piracy (this is a smokescreen in my opinion but one that the existing content lobby is very vocal about).
The upshot of all this is that the existing market as a whole (for audio visual entertainment) has not reacted positively to these changes (the internet), and the new ‘owners’ of the distribution technology are not subsequently aligned with the owners of the old distribution technology.
In each of the previous disruptions the overall market grew with each change. That generated more money and everyone was happy. I believe that this will eventually prove to be true this time as well. However, before that can happen we will need to see significant changes to the overriding business models in play. There will be some losers. They are fighting with every weapon they have.
As ever a sensible line of enquiry is to follow the money. So, returning to our key question, we must ask who will be paying for the content?
My key premise is that it will have to be the owners of the new distribution technologies through a redirection of some of their profits into content production, all enabled by the technology backbone (that they largely own, to the extent that it can be owned) that also enables the UGC universe to flourish.
In short, you and me, via the money we give to Google.
Ah, if only it were that simple. People have been asking Google to pay for content for years…
Well it isn’t so much more complicated actually. It is a simplification to reduce the whole burden (privilege) of funneling the money, to one company, but it won’t be just one company. As I suggested in the 2nd essay the obligation for funding will fall to those companies that succeed in monetising this new communication technology infrastructure. Google is leading the pack, but we must also look at Amazon, Apple, Facebook, Microsoft and others.
Ah but If only it were that simple, too…
Some significant shifts in both consumer and business culture must occur. It’s easy to speculate what the answer needs to be, quite another thing to forecast exactly what these changes will look like, and to understand how they will be come to be.
So trying to find a line of clarity let’s start with making our case by examining where money is coming into this new system, regardless of where we think that money should now go.
Any increase in computing clockspeed should lead to an increase in the amount of data that is passed over the network, if only because there is little need otherwise to increase that clockspeed.
This is a nuanced but essential point. From a business perspective this is the consumer incentive that leads to us paying the infrastructure providers to build ever faster networks. If a faster computer could not improve your experiences why would you buy one? For faster computer you can read, interchangeably, faster network. As more and more activities become driven via IP protocols the network and the hardware both need to be able to handle the increased speed and data requirements.
There is no point building 1gigabyte broadband if consumers do not own hardware that can manage such data speeds. But more importantly if there is no real consumer benefit to such improvement in all around speed then no-one would buy the faster product in sufficient volume to make it a profitable business.
So to understand where the money will come from, we have to ask ourselves what is it that will justify this massive increase in network and hardware speed, essentially what functions will be enabled that otherwise would not exist?
The answer is quite broad, broader than just better audio visual entertainment and it is precisely these functions, unrelated to the entertainment industry, and how important they are, that is taking the power to control the landscape away from them.
Let’s start with everything you do on your smartphone that is not watching Youtube, Vimeo or other video content.
There’s quite a lot of that isn’t there. Now I’m not a prolific user of apps, but here is what I use my smartphone for…
- Phone calls
- Holding my calendar
- Alarm clock
- Instant messaging
- Organising my contacts
- Taking photos
- Taking quick memos (voice and typed)
- Recording bits of music really quickly (me, my guitar)
- Maps, getting from a to b
- Web browsing
- Searching (voice and typed)
- Access to certain cross platform essentials via Dropbox (mostly pictures of my mineral collection)
- To do lists
- Checking the weather
- Checking the time
- Timing my pasta
- Simple calculations
- 1 game (really, they all want my address book!)
- Pocket – reading content
- Youtube – watching content
Only the last 2 get remotely close to the ‘content’ industries and in both cases in ways that the content industries would be wise to dislike.
Ok. Sticking with the personal theme we should acknowledge the strange phenomena of lifelogging, the desire to create a persistent and ambient record of everything that happens to you via always on cameras, and other sensors, carried on the person. Sounds a bit sci-fi and clumsy? Not anymore, not now that Google glass is a reality. Not everyone will persistently upload their Google glass output, but some people will.
Less extreme, but still a significant user of computing power and bandwidth is the use of health and fitness apps to capture a wide range of biological data points and the associated data driven by the instructed corrective habits (did you run that 5 miles, like I told you?).
Power joggers today will tell you precisely how far they have run, how many calories they burned and what percentage of their training regime obligation they have delivered. Some might even collect data on the number of footsteps.
Then there are the loggers that go beyond just the classic fitness regimes, the ‘quantified self’ lobby. Hours slept, pulse rate (per hour, per day…per minute?), blood pressure, pupil dilation…..as computing becomes more personalised so can we increase the personalisation of what we capture.
Beyond this simple interface between ourselves and our machines we must also acknowledge that there is a secondary call on the computing infrastructure brought into play by this ever increasing data collection behaviour. That secondary call is what we do with this data after we collect it and send it to the cloud.
In short we compute it. OK, so calculating your calorific trade per kilometre run isn’t likely to put an intolerable strain on our infrastructure, this is true. But nonetheless there are 2 additional impacts, both derived through scale. Delivering those simple calculations through a cloud platform is relatively easy. Doing it for 2 million people across America, 20 million across the world? And moreover, doing it on their timetable? That’s more of a challenge.
Still compare that to the bigger value in this trend, the societal impact of the largest collected data set of actual human biology data points, aggregated and delivered usable to the medical research entities of our modern society? Leaving the potential moral implications of such a thing to one side for the moment, you can at least understand that we are talking about a very significant enterprise, the sort that can only be undertaken by serious money. Powerful money.
OK, let’s move away from what happens with your phone, which by the way is much more sensibly understood as a computer. The phone part of a smartphone is categorically the least important thing on it (see Venkat’s “Manufactured field of Normalcy“).
If you look at my list, above, it should strike you that that is a list, first and foremost, of computing tasks. If we move on to the realm of my home / work computing setup we add a few more. They are important tasks (a fundamental pillar of this whole position actually) even though I am going to pass over them quite quickly right now. In essence they are the acts of creation that decentralised computing has made easier and easier.
So, this essay is a good example, in fact, everything on this blog, too. Every Powerpoint presentation I have to create, every piece of music I write and record, every photo I edit, every bit of code I write. (OK, code, that’s a stretch but I am actually signed up with Scratch, trying my best to get a real (if basic) experience of this fundamental, but increasingly invisible programming layer that controls our lives, and at the same time encouraging my nephews to get on board early).
And once this is all created? Why then I share it…I send it out for other people to find and consume. I have access, as an unimportant individual to the same distribution platform that is now an essential part of the Hollywood complex (whether they understand that yet or not).
So far, very little I have described involves the business output of the TV or movie industry, yet everything I have listed is provided by businesses that are only functional because of the internet.
It gets worse (or better, depending on your perspective).
Let’s talk about the internet of things (IOT) and how that is going to make calls on the inherent infrastructure of the internet. The internet of things in its most basic formalisation is the addition of identifiers and sensors to objects that previously did not have them.
Radio-frequency identification (RFID) is often seen as a prerequisite for the Internet of Things. If all objects and people in daily life were equipped with identifiers, they could be managed and inventoried by computers. Tagging of things may be achieved through such technologies as near field communication, barcodes, QR codes and digital watermarking.
A director of the RFID Technology Auto-ID European Centre at the University of Cambridge Helen Duce created a bold vision of a new RFID-connected world: “We have a clear vision – to create a world where every object – from jumbo jets to sewing needles – is linked to the Internet. Compelling as this vision is, it is only achievable if this system is adopted by everyone everywhere. Success will be nothing less than global adoption.
So this is your fridge telling you that you’ve run out of milk and it’s time to haul yourself down to the grocery store, right? Well, yes and no. It’s just as feasible and possibly more likely that the fridge won’t bother to tell you at all. It will however, tell the servers at the grocery store where you have your account, that you need some milk. It will also talk to your personal server, where you will have established a set of rules that your fridge follows. You might for example allow milk to be ordered automatically, but are more coy about monitoring how fast the tonic water (Gin and tonic anyone?) gets downed. Either way, the point is that significant amounts of bandwidth will be taken up with machine to machine transfers (M2M).
High frequency trading (HFT)? This is the application of algorithms that look for small advantages in stock movements and take value by making many very small trades very quickly.
Something like 30% of all stock trades today are high frequency trades, this is down from 60% in 2010. This article looks in some depth at why HFT is experiencing its first downturn since its original introduction. There are a number of reasons mentioned in the article, but the one that pinged my curiosity the most was the desire to locate data management hardware as close as possible to the exchanges themselves.
Speed doesn’t pay like it used to. Firms have spent millions to maintain millisecond advantages by constantly updating their computers and paying steep fees to have their servers placed next to those of the exchanges in big data centers. Once exchanges saw how valuable those thousandths of a second were, they raised fees to locate next to them. They’ve also hiked the prices of their data feeds
Human reflexes can’t take advantage of price differentials measured in thousandths of a second. I have included this example to demonstrate exactly how utterly dependent today’s infrastructure is on quick computing, let alone tomorrow’s. So, dependent, if it wasn’t clear, that an innate business decision such as where to build your office is governed by the gain in thousandths of a second in transfer speeds.
So in summary we have:
- A huge amount of personal activity based around computers, smartphones and tablets
- A significant extension of connectivity requirements coming from the internet of things and the widespread deployment of API’s
- The phenomena of M2M data transfer growing alongside the internet of things
Taken together these activities represent an important % of the modern consumer dollar and the future underlying infrastructural layer of ALL business.
In a way everything, not just the future of monetising AV content, is influenced by the internet and who can effectively monetise it.
As of the 26th June 2013 (when this was written) the top ten global firms by market capitalisation included, Apple, Google and Microsoft alongside banks, oil companies, global reach retailers and huge commodity producers.
[As a quick aside with regard to a specific source for market cap figures, there is variation between the data sources returned with a simple Google search. Nonetheless, even within these variations the observation stands and is quickly verifiable via Google if you so wish]
Telco’s start to appear between positions 30 and 40. Walt Disney, the first of the big AV content players comes in at 48, but beaten by Intel, Amazon and Cisco, News Corporation is at 93.
The telco’s are an interesting and important category. They currently own the last mile connections (the bit that connects your devices to the internet) for significant parts of the consumer broadband universe. If you add in the cable companies who also play in the last mile now, and we start getting close to the essential nature of the Gordian Knot at the heart of this conflict.
The telco’s are currently squarely aligned with the cable operators. Both are protecting, and acting in accordance with, their legacy business models.
Cable is a legacy of the entertainment business and is acting according to the principles I have been describing, playing to control both content and distribution.
Telco’s on the other hand, even though they have never been involved in content production, have been leading the development of internet access across the networks they already own (dial up originally, and then as an accident of their position in that market, 3G and 4G), which has afforded them a position that aligns very tightly to the entertainment lobby.
- Content/cable wishes to have control of the distribution network.
- Telecommunications as a sector is a business predicated on control of the distribution network.
Or put more acutely, telecommunications is exclusively a distribution network, and one that is in a temporary position of it’s maximum importance to the world. Telco’s are at the peak of their role in the world’s history, and they know this.
It sounds as though they should be enemies though, seeing as they both want control of the same thing? Well yes, you’d have thought so. Something else must be happening. I’d hazard that we are witnessing a loose conglomeration based on the principle that “my enemies enemy must be my friend”.
The telephone industry model was simple, they built wires to your home and you paid for those wires to carry telephone calls to you. That model is now challenged on 2 fronts, fatally.
- The (eventually) inevitable rise of ambient wireless connectivity
- The construction of fibre networks by businesses that are not telco’s
And guess who is leading on both of these fronts? Yep, Google.
If we go back to the sector makeup of the top 10 businesses by market cap (tech, banking, natural resources and global retail) we can see that the sectors with the ability to monetise the internet are clearly defined. Banking, resource extraction (oil, gas, minerals) and food have been there for a while, the ones that are now there specifically because of today’s landscape are tech and retail.
So, who has all the money? We are left with the naked premise we started with, that the 4 exemplars of the modern economy will need to step up to the plate. So, how are they doing?
Facebook, Tumblr, Twitter, Instagram etc…
I will start with social, simply because they are currently doing nothing to explicitly drive a reallocation of monetary resource to creators directly.
Indirectly however, they are very important. They largely solve the discovery issue for new creative producers, help massively with building a fan base and also provide easy to access platforms for distribution and ongoing communication.
Indirectly they are also an important part of driving the overarching adoption of any new paradigm. As an homogenous template they are fundamental to quickly disseminating new behaviours. However the new discovery, distribution and consumption mechanics turn out, you can guarantee that social media will have played a part in facilitating original discourse and the Darwinian selection of the successful ideas.
The other thing to note about social, in this context, is that as a sector it hasn’t really worked out its own business model yet. Perhaps once that conundrum is sorted we may see a more explicit contribution from social networks to the funding of content.
Apple and the other hardware manufacturers…
There is a lot of variation in the different approaches, and indeed in the goals being set, by specific companies in this space. Apple take the PR lead in terms of their perceived impact on the world in recent years, but have done little to suggest they want to press their advantage into the emerging landscape beyond building a new form of rentier class through their app store positioning. I am not impressed with the current iteration of Apple TV which seems to be a simple play to maintain the status quo with big content (the 2010 upgrade removed the hard drive and the ability to save files).
Presumably this is a holding position while the wider game is fought elsewhere? Although if I were to speculate I might suggest that a company so deeply imbued with both the positive and negative parts of Steve Jobs personality, is not yet equipped to play in a content world that will eventually have to embrace decentralised distribution of intellectual property.
There are other hardware companies making a much more direct assault on the status quo.
Intel for example. They have gone straight for one of the remaining monetisation strongholds of the content industry, the bundle.
They are releasing a set top box, that is said, will deliver content directly via IP protocols regardless of who a consumer buys their broadband from, without forcing consumers to choose a specific bundle of channels. Much like Apple TV and ROKU, essentially, but without the obligation to purchase channels you have no interest in. It isn’t going to be straightforward by any means as it requires a sea change in the way cable channels do business generally and specifically in the way they build relationships with the current gatekeepers such as Disney and TIME Warner.
For me it feels like a thin end (as in of the wedge) strategy that could well unravel the whole currently dominant approach. To make this work Intel will need to rewire the relationships that gatekeepers have with the content producers, the channels themselves. If that is successful, and it can only be successful by delivering a long term sustainable business model for those cable channels, then I expect this to bolster the destruction of monetisation channels started by Netflix’s decision to make the whole of House of Cards available at the same time.
This would be a world where content is made, and is made available to the consumer on their terms, and survives on its merits as programming, not its presence as filler to attract eyeballs and advertising revenue.
But it will be a fight. Not only do Intel face a mammoth set of negotiations under circumstances of good faith, they are also potentially in a situation where they face anything but good faith. Accusations are already being made of anti-competitive practices and undue pressures being brought to bear. Without any first hand knowledge of the situation I might suggest that this could be the incumbent’s only real defence, if, as has been reported the $58bn a year Intel simply intends to outspend the market to gain position.
I think that the progress Intel makes, or doesn’t make, will be an important bell weather for the evolution of modern AV entertainment.
Ok, what about Microsoft? Traditionally a software vendor of course, and even though they have recently entered the hardware market with tablets and the windows phone, there is another sector of their business where they have a long standing presence in the hardware sector. Console gaming.
The furore around the recent XBOX launch is somewhat instructive, in several different ways.
Firstly the launch buzz seemed to ignore the fact that the XBOX is (was?) first and foremost a gaming console. Watch this cleverly edited Youtube clip of the launch.
The point is well made after only about 15 seconds. As has been predicted in the gaming sector for a while, there is an opportunity (a need?) to compete for the ‘living room’ hardware leadership.
TV is compromised, TV content is going to be delivered over IP protocols, and if the TV is exclusively replaced by computers then the console business is likely to lose out to the computing business. Why would you have a console and a computer wired into your big screen when you only need one?
So, the XBOX has gone after the TV position.
They made a mistake though. The same mistake that Apple made with their TV product. They tried to launch it under the guise of the incumbent content business model, replete with all the protections and controls that they are used to in console gaming and a few more besides (to keep their new TV partners happy maybe?).
So, they insisted on an always on internet connection to play games (even single player mode) and introduced a slew of additional barriers to true ownership of the games themselves. So, it was suddenly no longer permissible to sell your game on to someone else once you were done with it.
It was a disaster with the gaming community, a largely young, male and technically skilled caucus and coincided with the launch of the PlayStation 4 featuring none of these new ‘features’. For those of us who don’t use consoles we had the pleasure of some wonderfully amusing combative advertising from Sony, and eventually a very rare business move these days, a volte face 180 degree removal of the offending policies. Wow.
Can I hear the gears shifting? Are these companies starting to yield to that ancient, yet seemingly forgotten, rule of business, ‘give your customers what they want’. Maybe, however, there is much still to happen before we can call winners and losers.
Next up, Amazon, the poster boy of e-commerce.
Amazon, along with Google, are particularly important because a) they are playing in so many spaces, and b) they already own business properties that traditionally belong in the AV entertainment sector.
Their most recent move, with regards to content (of course it’s worth noting they do own LoveFilm), is the launch of self-financed pilots which the users can watch and vote for and feedback on, the pilots receiving positive feedback being the ones that get made.
Ok, it’s a bit gimmicky in my opinion. I’m really not sure if such a feedback mechanism is a sustainable business model but it is nonetheless interesting because it is a very public experiment in taking more function away from incumbent big content.
The wired article is interesting for a couple of soundbites…
You just replaced Hollywood executives.
Amazon released its first wave of TV show pilots and is pushing them all out to viewers and letting them decide which ones get made. This is in stark contrast to traditional networks, which order a pilot, analyse it to death to ensure it fits the precise demographic audience advertisers want and then shoehorn it into the schedule.
Which tells you where the tech community sees this going. For my money the most biting quote is the top comment which reads…
Cant watch it in France.. I hate region bullshit.
And then the follow up…
VPN or proxy server my friend. A very simple solution to implement and takes less than 2 minutes to set your browser up to use a proxy server. Search for “fresh proxies” in yahoo, Bing, or Gibiru and go find a youtube video or a good blog article top learn the process.
So, for clarity here we have a frustrated customer who wanted to give Amazon money, but couldn’t (because of Amazon policy), being directed towards technical work arounds.
Aside from this attention grabbing move, the wider role of Amazon is actually more fundamentally important than just this play for the streaming market. For all the functions I talked about earlier, that are enabled by our modern communication infrastructure, the one I didn’t mention at all is e-commerce.
Amazon is the king of democratising e-commerce.
Their footprint in e-commerce is substantial. Aside from the headline grabbing position of their own e-commerce store (which is worth an essay in itself, and there are many such essays online), Amazon also own a surprising number of ‘profile’ e-retail business, including Zappos and pets.com
They offer finance to businesses that are established on their platform, and they also offer a wide range of services that allow you to power your e-business using their technology and fulfillment.
And as if that wasn’t impressive enough they also power vast swathes of the backend infrastructure of a large range of established and sizable businesses, including the likes of Netflix and Pfizer.
If it ever comes down to a simple fight between an installed and high functioning computing layer in society, and the entertainment lobby’s business model, I can only see one winner and that won’t be Hollywood.
And so we come at last to Google, the granddaddy of internet monetisation and scope creep. Where should we start. How about with Eric Schmidt’s assertion that Television is already over.
That was in reply to a question he took when he was talking with a group of advertisers. They wanted to know when internet video would take over from traditional TV. His answer was bullish and, in the UK at least, certainly does not take into account the massive disparity (still in favour of traditional TV) with regard to time spent, per day. Nonetheless this is not a frivolous man, he does have reasons for holding this opinion. It may take some time yet but the march of demographics is surely on his side, even if other factors don’t get us there quicker.
“More 18 to 34-year-olds watch YouTube than any cable network in the United States”
TV isn’t going to go away anytime soon, (radio, surely and incontrovertibly, beaten up by TV still exists after all) but in the same way that the concept of peak oil signals an important threshold with regard to the costs of oil extraction we should maybe consider his remarks as a recognition that we have already passed peak TV.
What about the move to position Youtube as the go to platform for non-user generated video content? In recent times Google have tried to sponsor healthy content production for Youtube with the promotion of brands and personalities via their own channels. More recently they changed tack slightly and announced that they would allow some channel owners to charge for subscriptions (55/45 split like the ad revenue).
This Guardian write up asks, “Can YouTube make subscription pay”, but in my opinion misses the main purpose of this experiment, citing the risk as a reduction in the reach of the platform (from free to paid, not the most scintillating observation), they are missing the converse position that this offers an opportunity for reach, of any scale, to content producers that otherwise have none. In my analysis, this is a risk free experiment and a first market position, exploring a potential monetisation mechanic for a future dominated by such decentralised distribution as YouTube and the like. They will not incur any significant cost to do this, so why not?
Looking beyond YouTube
Google play in so many spaces, largely financed by the success of their advertising business, and this breadth of exposure in many ways is the key element of their long term business strategy.
Frederic Filloux offers a somewhat bleak take on where Google is heading, and paints a convincing picture of a possible hegemony based on a wide ranging application of Google’s vast data sets as a significant risk mitigation asset across almost any substantial engineering project of the future. He’s not talking about the data they currently use to serve ads, he’s talking about the kind of data that gets used to build usage models for viaducts and road building schemes. Big industry.
It certainly explains why Google might take their mapping product so seriously. The most interesting fact for me, that surfaced through the Apple maps debacle was that Google employ 7,100 people to build and maintain their map product while Apple only employ 13,000 non retail staff for their entire business. Google is not mucking about when it comes to maps.
Then, building on the maps phenomena, there is Google’s driverless cars. What value should we give all that map data in a world where driverless cars are the norm?
Ingress, Google’s real world gaming concept, is according to this piece, a clever tool with which to extend data capture into spaces that cars are not able to get to, while Google glass will be a big part of the quantified self and persistent record movements. Robert Scoble was certainly impressed.
[If none of this seems relevant to the issue of content production and its economic underpinning, the argument (a quick reminder) is that the massive explosion of function outside of audio visual entertainment, that now shares the internet with the content industries, is the reason why the content industry can no longer control their key distribution platform. I am hoping to show here, that Google seems to be playing a wider more strategic game, in thrall to that observation, than anyone else, and subsequently it is Google revenues that will, through a variety of mechanics, end up making significant contributions to the content production payment challenge.]
Everything I have mentioned so far pales compared to the 2 big plays Google are making that should really be sending out the warning signals to the content industry.
- Google fiber
- Wireless connectivity
The fiber experiment started in Kansas city with the installation of 1 gigabyte internet connections at a family friendly price. Certainly this is what all the headlines told us. They weren’t telling lies. They just omitted to mention the other part of the experiment. The move into content distribution. A significant piece of information, and a clearly stated goal (emphasis added).
“Local content included: Google Fiber will offer content from local institutions, such as educational videos from a hospital or school. The company said the goal is to become a content-publishing platform.”
They want to be the medium and the message,” Lawrence Lerner, president of management consultancy LLBC, told SNL Kagan. “The endgame for them is to become that overall knowledge and information provider. What they’re missing is content.
While Google has loads of user-generated content through YouTube Inc., getting legitimate access to premium content can be complicated, as programmers still call the shots. Google Fiber does not offer Walt Disney Co.’s ESPN, News Corp.’s FOX News or AMC Networks Inc.’s AMC cable channel, but it is in negotiations for carriage, Google spokeswoman Jenna Wandres told SNL Kagan.
I was particularly drawn to the quote “they want to be the medium and the message” as it seems to be somewhat consistent with the phrase “content is King, distribution is King Kong”, which is worth a revisit here.
The key takeout from the King Kong quote is not that a company should prioritise owning distribution over content (if they were lucky enough to have the choice) but that any leading player in this game will always strive to be both King and King Kong, there is no other way to win.
Time’s take is interesting, especially if you remember they are competitors to Google as Time Warner. It’s a very polite article but revealing. They point out that Google has been making very expensive and highly strategic purchases since 2006, buying up dark fiber and paying $2bn for 111 8th avenue, the former Port Authority building and important “telecom carrier hotel”.
Their take? This is a wakeup call to the broadband industry of America, a kick up the arse, an instigating play to force the wider ISP community to provide hyper fast broadband to the masses. The incentive? To increase the number of searches that Google get paid for. Hmmm. Maybe, I’m more inclined to think that investments of this scope and cost are indicative of a desire to take a much more controlling market position, in many sectors, rather than fire-starting competitors in just one.
On Thursday, six years later, we got our answer. And it’s still no. Google’s goal, by building the fastest city-wide broadband network in the country, is not to compete with the giant national cable and telecom firms. Rather, it’s to shame these legacy giants, including Comcast, Time Warner Cable, Verizon, AT&T, and others into improving U.S. Internet performance.
What else could they say (my emphasis added)?
OK, so what about wireless connectivity and eventually ambient connectivity?
Remember Larry Page talking about wanting to experiment with his own private experimental country. I thought that was pretty crazy. It is, however, starting to make more sense. See these tweets.
White space is the unused wireless spectrum owned by TV companies. Google wants it.
Then we have the move into wireless connectivity. That it is being trialled in Africa and Asia. A result of historic realities and a clear understanding these emerging markets are going to be ever more important. Google really isn’t playing for shits and giggles.
Apparently They have even developed technology that would allow them to deploy connectivity via Balloons. Sounds crazy? Sounds like genius to me.
The move would also allow Google to get to this new population first before other carriers descend en masse. With numerous cable companies and wireless carriers in the U.S. and Europe crying foul that Google benefits from running “over the top” apps and services their networks with little benefit to the carriers themselves, Google’s first-to-market wireless service in these underdeveloped areas would allow the company to get out ahead of its “competition” and circumvent their ability to prevent Google from effectively serving new audiences.
If they can make it work in the emerging markets, and those markets in the next 30 years are the growth markets (individually and as contributors to global growth), then you can, eventually, expect it back home too.
Right enough scary links about Google’s ambitions. I seem to have gotten away from myself. It’s time to wrap this whole piece up.
My argument is simple, even if the detail is extensive.
- Whoever can monetise the distribution technology usually ends up playing in content production too, in the most simplified version of events, to avoid being taken to task by the leading content producers, a negotiation position if you will.
- Because the latest iteration of distribution technology is the pyramid base for so much more than just the audio visual content industry we need to acknowledge that the control of this technology is not going to remain with the entertainment lobby.
- The leading lobbies that can compete with Hollywood for control are Hardware (Apple), Social (Facebook), e-commerce (Amazon) and search (Google). These are the business sectors that lead, globally, in monetising the web.
- Of all these companies the one to really watch is Google. They sell hardware (android), are big in social (G+), make most of their money because of e-commerce (search), and on top of all that, as it stands today, they are search (search).
Google is playing everywhere.
So, to return to the key premise of this essay, who pays for content? Google does.
Via the money we give them for organising the world’s information.
No content, no search, no revenue.
There may come a day when their business isn’t dependent on search revenues but that’s not happening any time soon, although I’d bet a pound to a penny that that is a topline objective of their strategy. In the interim, however, every other project is funded by the search money.
Who pays for content? Google does, they have to. They’ll find increasingly oblique ways of doing it but mark my words, they will redirect monies to ensure that content is still produced for a while yet.
Earlier I suggested that the big content businesses and the telco’s were in a conflict with the reality of modern computing technology. I very much stand by the observation that they are entangled in a Gordian knot. A Gordian knot is, if you recall, a knot that is impossible to untangle.
The only solution is to cut the cord. Break the model. Move on.
Cable and telco’s describe the provision of entertainment content, via internet protocols, as ‘over the top’. This is an interesting piece of semantic self-delusion, at an industrial scale. There is no technology our world has known that is more embedded and potentially invisible, yet fundamental and essential, than the internet protocols that are fueling our modern epoch. Over the top? Nope. A much better analogy is the deep foundation required for any modern building, large or small. Essential and going nowhere.
We would seem to be living through that old Chinese curse, “may you live in interesting times”. Much is happening that, perhaps, really should be found on the pages of classic literature (or perhaps, more accurately maybe should stay on the pages of classic literature). There are certainly 2 opposing angles to consider, although perhaps not the 2 that would initially come to mind.
This wonderful cartoon impressively juxtaposes our dilemma, stuck between the dysfunctional promises of either George Orwell or Aldous Huxley.
So, 1984, Brave New World or a bit of both?
Carrying on this mini tour of our surveillance reality, it strikes me that there is a vast misunderstanding of one of the key arguments relevant to this situation, the “if you have nothing to hide, you have nothing to fear argument”.
There are plenty of deeply constructed and well written pieces on the web making the detailed arguments, a simple Google search will reveal them if you are interested. I am going to give you 3 links instead, that I hope shine a little light on the conundrum without getting into dense legal defence of essential rights and the structure of the rule of law.
First is this interview, from the New Yorker, with Brewster Kahle, the founder of the non profit Internet Archive. Kahle is one of the few people who has received a national security letter and is allowed to talk about it. He most certainly had nothing to hide, in this case he was simply the custodian of information the government wanted.
Did you tell your wife?
No! I couldn’t!
And is she now going, “What’s wrong? Why are you white as a sheet?”
I did go home that night and over dinner with my family, I said, “Ask me what it was I did today, and remember my answer.” So my son, who was, I don’t know, nine, or something like that, asked me, “Daddy, what did you do today?” And I said, “I can’t tell you.” That was the only thing I said, and then months and months and months went by.
Next we have this obnoxious video courtesy of Youtube. A somewhat visceral reminder that privacy is so much more than a tool for hiding egregious wrongdoing.
Finally, a delight. A wonderful piece of short film making, hypothesising a future that is really not too unbelievable. This is relevant to today’s revelations of deep surveillance but is more valuable as a dystopian view of a future where privacy has become a deeply commercial entity.