LimeWire Gets Nailed

May 21, 2010

Chalk one up for big music.  Last week, US District Court Judge Kimba Wood ruled that LimeWire, the big file-sharing service, was in violation of copyright, and that their business model depends upon it, nor has it taken meaningful steps to  stop this infringement from happening.  Limewire, which unlike most P2P services is way out in the open, and based in New York (as opposed to out in the middle of the ocean somewhere), does give a little warning on its site when users are about to download copyrighted material, still, about 98.8% of what gets downloaded through it is in violation. The next step in the case is a June 1 conference, which will lay out the schedule for moving forward, to resolve some still dangling issues.

Here’s LimeWire CEO George Searle’s statement:

LimeWire strongly opposes the Court’s recent decision. LimeWire remains committed to developing innovative products and services for the end-user and to working with the entire music industry, including the major labels, to achieve this mission. We look forward to our June 1 meeting with Judge Wood.

And the happy dance music below comes from Mitch Bainwol, CEO of the music industry’s lobbying group:

This definitive ruling is an extraordinary victory for the entire creative community. The court made clear that LimeWire was liable for inducing widespread copyright theft.

Go RIAA.

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They Know You’re a Dog

May 21, 2010

Some news from the Electronic Frontier Foundation: most web browsers have a unique “fingerprint” that could be used to track people as they wander through the Internet.  The EFF did a study with volunteers who visited a specific web site, logging in information from each volunteer’s system and browser.  Then they compared that data to a database of “configurations collected from almost a million other visitors”.  What they found was that 84% of the configuration combinations were unique; browsers with Flash or Java plug-ins are 94% unique.  And therefore, trackable.  Even when the volunteers went back and changed their browser settings, the EFF could still identify them with 99% accuracy. So if online privacy is important to you, and you routinely delete HTML and Flash cookies, you can still be identified by the fingerprint of your browser.  So if some nefarious company wanted to track users without their consent, they could do so by recording these unique characteristics.  For those of you who are academically inclined, here’s the whitepaper.

And PS, if you want to see the cartoon from which the title of this post comes, you can find it in the New Yorker’s Cartoon Bank.

More Like “TV Somewhere”

May 21, 2010

Cable operators are getting more and more connected to the idea of “TV Everywhere”. This is the idea that is meant to address the predilection of viewers to watch stuff on any device, while preserving the profits that cable operators, show producers and networks make.  Comcast, Cablevision, TimeWarner and Cox are all either in testing of or planning to roll out some sort of intiative to allow viewing to take place on any video-enabled device.   They are, says the LA Times, holding on to this idea, rather than play dice with Apple, which would like them to agree to a 99-cent per episode plan. “Some feared that Apple’s proposition would wreak the same havoc [as iTunes did to the music industry]  upon the average $70-a-month cable-TV customer.” TV Everywhere, on the other hand is free, as long as viewers are already cable subscribers.  The problem is that these roll-outs have not been incredibly successful so far.  For one thing, the authentification process is cumbersome –  Comcast subscribers find that “ it takes 11 steps to determine which cable programs an online viewer pays to receive. Comcast is trying to simplify this authentication process to a single click.” And of the major networks, only CBS is included in these trials, since the others are committed to Hulu.

“While the cable industry sees TV Everywhere as a way to offer subscribers broad access to programming online, others see a far more sinister motivation: snuffing out free online TV. Their fear is that the cable industry is determined to maintain its control as television gatekeeper, locking out competition. ‘TV Everywhere is just a tactic to keep people paying,’ said Mike Vorhaus, president of Magid Advisors, a media consulting firm. ‘The cable companies want more customers. They want to build a wall and penalize us if we don’t pay.’”

The Media Has a Field Day With Facebook and Privacy (or Lack Thereof)…Does Anybody But the Media Care?

May 21, 2010

First thing last week, The Financial Times said that Facebook hired a former Bush regulator, ex-FTC chief Tim Muris, as a consultant to make the company’s case to regulators.  That’s obviously in answer to the news of the week before about the  proposed Boucher bill, which would require publishers who use third-party data gatherers (like ad networks) to provide clear opt-out instructions before placing a cookie on a user’s  computer.  This is a pretty good move on FB’s part, since the current FTC has given every indication that it cares deeply about online privacy. Consumer protection head David Vladeck has taken pro-privacy positions, as has newly appointed commissioner Julie Brill. But that was the beginning of the week, and as days went by, and as media stories got more heated, it seemed more and more unlikely that FB will be able to avoid litigation, no matter who they hire, unless they revise their instant personalization policies.

The media has latched onto how convoluted the opt-out process is, and the deluge of stories gets more and more interesting and more difficult to avoid.  You have probably seen the Times story by Nick Bilton (remember him?  He was the one whose Twitter interview with a FB employee revealed Mark Zuckerberg’s lack of concern over privacy) revealing that FB’s privacy policy is longer than the Constitution. And you probably saw the chart that the Times published (which has made its way all over the web and back again) showing the tangled web of 170 options that you would have to go through to manage your privacy.  The Huffington Post, meanwhile, posted a handy 2 minute video telling you how you can control your profile, just like you could in the olden days, meaning last year, or even a few months ago. Read the rest of this entry »

The Evolution of Facebook

May 14, 2010

Matt McKeon, a developer at IBM, looked at the timeline that the EFF published of Facebook’s privacy defaults, and how they’ve changed since the social networking site’s inception in 2005.  Disappointed that the timeline was written, rather than visual, he decided to create the visual himself.  Which he has done to great effect.  He explains that he derived the data for the chart from Facebook’s terms of service agreements over the years.

Unfortunately, I can’t embed this, so here’s a link, and by the way, the animation won’t work in IE.

http://mattmckeon.com/facebook-privacy/

There’s No TiVo Effect, But Cable May Be Headed to Dust Anyway

May 7, 2010

Advertisers fear TiVo and DVRs. And for years they have been saying that time shifting will kill off the 30 second spot.  Who will watch them when they can skip over them?  Some of us with time shifting devices rely on those spots so that we have time to take a bathroom break or do the dishes, but as it turns out, says a new study by Duke University, that even people who fast forward through commercials are exposed to them.  The study found that 95% of people still watch TV live, rather than recorded.  And even those who fast forward through commercials still watch the screen o know when the show resumes, and therefore see the ads – just a lot faster.  The study’s authors tracked purchases of new products, advertised products and store brands across 50 categories, as well as the viewing behavior of those with the DVRs. No matter how the researchers looked at it, DVRs did not affect what people bought.

 

Up till now, predictions that the rise of web video will replace cable, satellite or premium channel purchase have seemed pretty specious.  While they watch plenty of web video, most people really prefer watching TV on their TVs.  After all, over 90% of Americans have access to at least a basic for fee service. But those predictions may be coming into their own, if a recent study by The Yankee Group is correct.  The study found that one in eight American consumers will either scale back or completely eliminate their for-fee service this year.  Now, one in eight could not really be considered a surge, but it is likely a warning sign.  The reason, which should not be surprising if you’ve looked at your cable bill lately, is mostly financial.  Cable and satellite viewers pay an average of $71 per month, and they receive an average annual price hike of 5%, according to research firm Centris. For people who don’t watch sports (which can pretty much be exclusively seen on live TV) that might start to seem like a lot of money when there are alternatives out there.  A big question remains for many – why am I paying so much when I don’t get to choose the channels I get?  Eventually, the web is going to bring an element of choice to people who didn’t have any. At which point, either cable companies will unbundle their products, or start to lose subscribers. This does not mean, by any stretch, that people in any large numbers will be abandoning televisions – far from it, in fact.  More people have more TVs in their homes than they ever did before.  It’s still the viewing medium of choice. But 43% of American consumers  have their TVs connected to the internet connected via a Wii, PlayStation or Xbox.                   

“This is the key part of the equation,” says a Yankee Group analyst.. “Not just are these devices connected to the Internet, but they’re coming prepackaged with the capability to connect to rich video sources. That really becomes a competitor to pay TV service.”

Since the easiest devices to connect to the Internet tend to be video game consoles, and they tend to be owned by 18-34 year olds, Yankee Group expects that will be the group to cut their cords first.

“Just like with telephone land lines, it’s going to become hard to sell pay TV to anyone under 30.”

Consumers ditching cable might have something to do with the logic behind the subscription price for Hulu’s new premium service – because if you are already paying over $100 bucks a month for cable and internet connection, why would you shell another $10 for Hulu, to see some of the shows that you are already paying for on CATV or cable?  It really only makes sense for the cable-disconnected, or to those who are only getting the most minimal cable service.

Magazines Get A Second Life

May 7, 2010

There is a mood of upbeat optimism at magazines, now that they have entered their second life.  And we’re pretty sure that has happened, as the chief exec of Future Publishing, in the UK, said that digital publishing would ensure that paper mags will become “collectible artifacts rather than sources of valuable information… content that we want to own rather than connect with”.  Speaking before the PPA conference in London, Stevie Springs added that magazines would have to accept changes like enver before, and fast.  “Darwinism continues,” she said, “But it’s Darwinism on speed.   It’s survival of the fastest…we have to adapt and accept that some things are done much better in digital that in print.” She also feels that the next three years will be better than the last 3 have been, largely as the magazine figures out its new habitat. 

Folio mentions that digital vendors are at the moment either creating their own online marketplaces or creating “magazine branded storefronts and/or apps”. It makes sense for them to take themselves out of the picture in favor of the magazine brands, since that is where the public will be going. Most feel that tablets like the iPad are the basis for the second coming of the magazine business. Says the founder of Technologizer, “They already have well-established publisher relationships …, and far more people are going to want to read magazine-format publications on tablet-style devices than ever wanted to on PCs.”  Publishers are already creating apps for the iPad as well as downloadable content for the Kindle, the Nook, and mobile phones.

Condé Nast was a late web holdout, and the New Yorker has a brand spanking new web editor, who spoke with Sparksheet about the challenges for maintaining the execellence of that magazine’s editorial integrity.  Blake Eskin says that Condé stills maintains that the purpose of the web sites is to generate print subscriptions. While they have met the digital age with podcasts, author interviews (that are posted on Facebook) and blogs, they do not post the entire magazine online, but they do have some content that is web-only.  Eskin says, “…we keep an eye on what kinds of stories tend to do well…. We try to bring that sense of polished editing and excellence to things we can do simply but well.”

Open Graph Opens Up More Privacy Issues for Facebook

April 30, 2010

The week started on the weekend, with visions of Chuck Schumer talking about Facebook and privacy.  FB’s new initiative, Open Graph, which is an attempt to socialize the entire web, got good press from marketers and itself last week, but the privacy police were bound to get after what ReadWriteWeb referred to as FB’s “ambition…to kill off its competition and use 500 million users to take over the entire web.”  And lo and behold – I went to Pandora;  there was my Facebook photo, there were my friends and their stations.  Did I ask for this? – no, I did not; did I get to opt out (on Facebook’s home page)? – no I did not.  And because I did not opt out the first time I went on to Pandora after it got connected, I never got the opportunity again. Now, I admit that a lot of people are going to like (pun intended) this – the idea of being plugged into the things that your friends like is very appealing to Facebook users, or they probably wouldn’t be there in the first place, but it raises the creep alarm to me in a big way.  Here’s the insidious thing that Facebook is doing.  Ultimately, everyplace you go on the web, you will leave a little footprint (you are already doing that, but now it will stick around a lot longer than 24 hours), paving the way for lots more targeting than you’re already getting. If you want to opt out, you have to opt out on each individual site to which Facebook’s Open Graph connects, which, eventually will apparently be everything. By the way, if this is worrisome to you, Mashable has instructions on how to end instant personalization – it lies deep within the heart of your Facebook account, where you’d never otherwise know to go.    So Chuck Schumer and three other senators are calling for  the FTC to make sure that Facebook will  implement new controls that will make it easier for users to determine how much of their personal information is shared with other Web sites.

This is not the first time that Facebook has shown its oblivion to privacy issues – there was, for instance its ill-fated Beacon program of two years ago – in case you don’t remember , Beacon sent data from external web sites to users’ news feeds; its purpose was to allow targeted advertising and let users  share their activities with their friends.  Again, no opt out feature, and consumer outcry eventually shut it down.  Ken Auletta, in his book about Google, discussed the engineer mind-set, which is sort of like “Wow, this is cool – if we can just do THIS, then THIS will happen,” with very little thought about the actual implications of that coolness.  Most  people don’t think like engineers, though, and that’s where people like Mark Zuckerberg get into trouble.  In a twitter feed this week, Times writer Nick Bilton quoted a conversation with a Facebook employee who said that Mr. Zuckerberg does not believe in privacy.  I’ll buy that – it’s just not in his engineer’s lexicon. And, in an interview with TechCrunch’s founder earlier this year, Zuckerberg said that he did not think that privacy was the “social norm” any longer – “”People have really gotten comfortable not only sharing more information and different kinds, but more openly and with more people.” While this is entirely true, largely due to Facebook itself, it is also true that people like to at the very least feel like they have some control over what they’re sharing, and with whom .

Whether the senators siccing the FTC on the social networking site will amount to anything remains to be seen – it will really be up to Facebook’s users to either prove or disprove Zuckerberg’s belief that we are all open to sharing our web surfing habits with everyone we know. And ultimately to marketers that we don’t know.

We will certainly be discussing this more, in terms of the initiative’s implications for brands, for marketers, and for the publishers of sites.

Teens, Their Phones and 100% Penetration

April 30, 2010

Wireless Carriers are in for a rough ride, as cell phone penetration gets closer to 100% in the US.  It may never be actually 100%, although in some countries it’s more than that. Both AT&T and Verizon had a big loss of customers year over year from 2009’s first quarter.  Hmm.  Maybe growth will come from people’s attachment to specific products, not to specific carriers.  I predict that Verizon’s sales will jump exponentially if they ever get around to getting the iPhone.  In any case, the CTIA has a list of all sorts of wireless facts, and one of them is that while in 2005 the number of wireless only households was 8%, it is now 23% – and that’s a number that’s likely to continue to grow. In 2005, 81 billion text messages were sent per year – now there are 2 trillion. That’s a lot of thumb action.

And that number is really high for teens — Half of teens send 50 or more text messages a day, or 1,500 texts a month, and one in three send more than 100 texts a day, or more than 3,000 texts a month. Older teen girls, which will come as no surprise to anyone who lives with one, top the charts at an average of 100 texts a day. This from Pew’s Internet and American Life Report on Teens and Mobile Phones.  Here are some more fun facts about teens and their phones:

Meanwhile, Black teens are more than twice as likely to use their cell phones for getting online than their Caucasian brethren are (44% vs 21%). Hispanic teens weighed in at 35%.  Most notable about this study is that teens who come from low income households where there is less likely to be computer do the most connecting to the internet with their phones.  They are more than twice as likely to get online this way than more affluent groups.

There is an impact here about largely urban teens that marketers should heed.  Says eMarketer:

Brand marketers trying to tap this market must change their thinking about this largely urban audience… Urban millennials in particular are well-connected socially and open to people from all backgrounds. They have moved beyond brands that still rely on athletes and entertainers and now expect authenticity from marketers and advertisers.

Mary Meeker Speaks

April 26, 2010

Morgan Stanley Internet analyst Mary Meeker  issued her 2010 report on Internet trends.  And we all listen.  She says that we, and by that I mean the world, has entered the fifth major technology cycle, marked by the adoption of the mobile Internet in a big(ger) way. She says that mobile will be bigger than desktop usage in five years, and that 3G coverage has reached at least 20% of all the world’s cellphone users.  AT&T is already seeing the result of the data ramp up, as their lines in NY and SF get clogged up.  Says GigaOm, reporting on her report:

The average cell-phone usage pattern is 70 percent voice, while the average iPhone is 45 percent voice. At NTT DoCoMo, data usage accounts for 90 percent of network traffic. The analyst says her team expects mobile data traffic to increase by almost 4,000 percent by 2014, for a cumulative annual growth rate of more than 100 percent. Such numbers will likely strike fear into the hearts of carriers, but joy into the hearts of equipment suppliers and mobile service companies. (by the way if you feel like going through all 87 of her slides, you can do so on GigaOm’s post).

Here are some of the other trends she sees:

Mobile E-Commerce — mobile will revolutionize e-commerce, forcing both innovations for both online and brick-and-mortar companies. She identifies location-based services, push notifications, transparent pricing, and instant mobile delivery as four potential areas this will occur.

Virtual Goods will be a growth area.

Applications:  Meeker refers to Apple and Facebook as”vibrant developer / application platform ecosystems, ” and suggests that companies will continue to leverage social networks for fans and for revenue.

Video: Meeker’s says that video will outpace VoIP and other resources people seek to access with their mobile devices, and that video is driving the growth in mobile Internet traffic. And speaking of VoIP, if Skype were a carrier, it would be by far the largest in the world. She sees a big future for Google voice, as well.

She also says that people are more willing to pay for content on mobile devices than they are on desktops (good news to Apple’s new content providers), and, marketers take note, personalization is more important on mobile than anywhere else.

As far as social networking is concerned, Facebook is now the largest repository of user-generated content and games, while the main professional repository has yet to be determined. Since people spend more time on social networking sites than on other places (232 billion total minutes in 2009), and the time spent on them is growing rapidly (50% more in 2009 than in 2008), in case you hadn’t figured it out, this is the place to be.