Sooner or later the Chinese people will rear up and revolt for good against the crushing burdens placed on their freedom of expression. And when they do, I hope they hold accountable the American technology firms that currently collaborate with the Chinese government in its effort to silence and imprison its people.
For now, all I can do is rail in this little blog. The latest bit of news that has got my dander up: Reporters Without Borders said today that Yahoo! is responsible for yet another jailing of a Chinese person.
Jiang Lijun was sentenced to four years in prison for an email he sent. That email was turned over to authorities by Yahoo! and supposedly contained information on Mr. Jiang’s plans to overthrow the Communist party. Among the purported inflammatory statements in the email were Mr. Jiang’s stated preference for “so-called western-style democracy.”
Reporters Without Borders has visited and lobbied Yahoo! to take its servers out of China.
Last week we went to the headquarters of the company to urge them to end this collaboration. We called on them to remove their email servers from China, because it is the only way to avoid taking part in the current crackdown against journalists and democrats.
Fat chance. Google, Yahoo!, Microsoft and all the others can only see the huge riches to be made in the enormous Chinese market. Don’t get me wrong. I’m a capitalist too; I just also like to sleep at night. I wonder what kind of sleep the folks at Yahoo! get.
Posted by Cynthia Brumfield at 7:23 PM | Print | Comments (0)Apple Computer Inc. issued its Q2 06 earnings report (the company’s Q2 fiscal quarter ended on 4/01/06) today showing strong sales and net income growth, and continued strong demand for iPods. Revenues or net sales were $4.359 billion, up 34% year-over-year. Net income was $410 milion, up 41% year-over-year.
iPod sales, which, like revenue and net income were down sequentially from Apple’s seasonally strong Q1, weighed in at 8.525 million units sold during the quarter, up 61% year-over-year. Music sales, which consists mostly of music and video sold via iTunes, reached $485 million, up 125% year-over-year.
| Apple Operating and Sales Data by Segment, Product | ||||||
| Units in 000s, $ in mil. | ||||||
| Q205 | Q106 | Q206 | ||||
| Operating Segments | CPU Units | Rev | CPU Units | Rev | CPU Units | Rev |
| Americas | 447 | $1,443 | 515 | $2,700 | $ 494 | $2,122 |
| Europe | 276 | $ 705 | 387 | $1,242 | $ 316 | $ 966 |
| Japan | 102 | $ 284 | 81 | $ 355 | $ 82 | $ 309 |
| Retail | 144 | $ 571 | 193 | $1,072 | $ 154 | $ 636 |
| Other Segments | 71 | $ 240 | 78 | $ 380 | $ 66 | $ 326 |
| Total Operating Segments | 1,070 | $3,243 | 1254 | $5,749 | $ 1,112 | $4,359 |
| Product Summary | ||||||
| Desktops (2) | 608 | $ 803 | 667 | $ 912 | $ 614 | $ 833 |
| Portables (3) | 462 | $ 691 | 587 | $ 812 | $ 498 | $ 739 |
| Subtotal CPUs | 1,070 | $1,494 | 1254 | $5,749 | $ 1,112 | $1,572 |
| iPod | 5,311 | $1,014 | 14043 | $2,906 | 8,526 | $1,714 |
| Other Music Products (4) | NM | $ 216 | NM | $ 491 | NM | $ 485 |
| Peripherals & Other HW | NM | $ 280 | NM | $ 303 | NM | $ 264 |
| Software & Other | NM | $ 239 | NM | $ 325 | NM | $ 324 |
| Total Apple | $3,243 | $5,749 | $4,359 | |||
| (1) Other Segments include Asia Pacific and FileMaker. | ||||||
| (2) Includes iMac, eMac, Mac mini, PowerMac and Xserve product lines. | ||||||
| (3) Includes iBook and PowerBook product lines. | ||||||
| (4) Other Music Products consists of iTunes Music Store sales and iPod related services and accessories. | ||||||
| NM: Not Meaningful | ||||||
Posted by Cynthia Brumfield at 6:40 PM | Print | Comments (0)
As Cynthia notes, Yochai Benkler’s new book, “The Wealth of Networks: How Social Production Transforms Markets and Freedoms” is an important work. Larry Lessig is especially effusive in his praise:
This is—by far—the most important and powerful book written in the fields that matter most to me in the last ten years. If there is one book you read this year, it should be this…Read it. Understand it. You are not serious about these issues—on either side of these debates—unless you have read this book.
Since getting back from a relaxing and largely work- and Internet-free vacation in central Mexico, I’ve been reading portions of “The Wealth of Networks,” along with two other recently published books: “Democracy’s Edge: Choosing to Save our Country by Bringing Democracy to Life,” by Frances Morre Lappe, and “America at the Internet Crossroads: choosing the road to innovation, wealth and a supercharged economy,” by Mike Bookey (disclosure: I provided feedback on several drafts of the latter and have known Mike for several years).
Among the general themes these books appear to share is the value of voluntary cooperative collaboration and commons-based and democracy-enhancing systems in a modern world in which dominant economic and political systems and institutions face rapid and dramatic change; dangerously high levels of economic, social and political imbalance and dysfunction; and mounting challenges to their status-quo modes of operation.
Aspects of this broad trend include “social production” (Benkler’s main focus), invigorated grassroots democracy (a key Lappe theme), and the movement to create publicly owned and controlled commons-like “packet-transport” spaces that provide local communities with near-infinite connection capacity on a ubiquitous open-access basis (the thrust of “America at the Internet Crossroads”).
I recommend Lappe’s book, which contains many inspiring real-world stories about bottoms-up creation of new democracy-friendly systems, organizations and practices, from which it extracts lessons and themes regarding grassroots solutions to problems not well-enough addressed or even exacerbated by established institutions. While its focus is mainly on “human” and organizational issues and trends, Democracy’s Edge does touch on technology and Internet-related developments, which Lappe cites as enabling elements for a transition from the “Thin Democracy” dominant in today’s world, to a more evolved and invigorated state she refers to as “Living Democracy,” a transition that is the thematic thread linking her book’s many anecdotes.
I also strongly recommend Mike’s book, which I think presents a strong argument and practical blueprint for a phased-in transition from today’s two-pipe vertically-integrated duopoly mode of Internet access to an “Internet road” model that would serve as a 21st century parallel to the 20th century deployment of a ubiquitous public motor vehicle road network. In future posts I’ll attempt to summarize and comment on key elements of Mike’s book and how it fits into the broader picture of IPD-related issues and developments.
The remainder of this post focuses on Benkler’s “The Wealth of Nations” which, as Cynthia, Larry Lessig and others have noted, is worthy of a thoughtful read regardless of one’s position on key issues it addresses and within the information economy. While, at 473 pages, the book covers a wide range of important and timely topics likely to be of interest to IPD readers, I believe its unique power and value derives in large part from the fact that its analysis is grounded in fundamental insights and assertions that, if correct, go a long way toward justifying its ambitious-sounding subtitle: “how social production transforms markets and freedom.”
In the book’s first chapter, Benkler introduces his basic argument that the Internet’s technology and structure is enabling increasingly efficient “nonmarket social production.” This development, he suggests, promises significant and potentially dramatic benefits in economic, social and political spheres. But, at the same time, he says, it challenges the perceived interests of incumbent entities that have aggregated significant power in what he calls the “industrial information economy.”
…we are seeing the emergence of a new stage in the information economy, which I call the “networked information economy.” It is displacing the industrial information economy that typified information production from about the second half of the nineteenth century and throughout the twentieth century.
The most advanced economies in the world today have made two parallel shifts that, paradoxically, make possible a significant attenuation of the limitations that market-based production places on the pursuit of the political values central to liberal societies. The first move, in the making for more than a century, is to an economy centered on information…and cultural…production, and the manipulation of symbols…The second is the move to a communications environment built on cheap processors with high computation capabilities, interconnected in a pervasive network—the phenomenon we associate with the Internet.
It is this second shift that allows for an increasing role for nonmarket production in the information and cultural production sector, organized in a radically more decentralized pattern than was true of this sector in the twentieth century. The first shift means that these new patterns of production—nonmarket and radically decentralized—will emerge, if permitted, at the core, rather than the periphery of the most advanced economies. It promises to enable social production and exchange to play a much larger role, alongside property- and market-based production, than they ever have in modern democracies.
What characterizes the networked information economy is that decentralized individual action—specifically, new and important cooperative and coordinate action carried out through radically distributed, nonmarket mechanisms that do not depend on proprietary strategies—plays a much greater role than it did, or could have, in the industrial information economy. The catalyst for this change is the happenstance of the fabrication technology of computation, and its ripple effects throughout the technologies of communication and storage.
Benkler offers three key observations about out “the emerging information production system.”
First, nonproprietary strategies have always been more important in information production than they were in the production of steel or automobiles, even when the economics of communication weighed in favor of industrial models. Education, arts and sciences, political debate, and theological disputation have always been much more importantly infused with nonmarket motivations and actors than, say, the automobile industry. As the material barrier that ultimately nonetheless drove much of our information environment to be funneled through the proprietary, market-based strategies is removed, these basic nonmarket, nonproprietary, motivations and organizational forms should in principle become even more important to the information production system.
Second, we have in fact seen the rise of nonmarket production to much greater importance. Individuals can reach and inform or edify millions around the world. Such a reach was simply unavailable to diversely motivated individuals before, unless they funneled their efforts through either market organizations or philanthropically or state-funded efforts. The fact that every such effort is available to anyone connected to the network, from anywhere, has led to the emergence of coordinate effects, where the aggregate effect of individual action, even when it is not self-consciously cooperative, produces the coordinate effect of a new and rich information environment. One needs only to run a Google search on any subject of interest to see how the “information good” that is the response to one’s query is produced by the coordinate effects of the uncoordinated actions of a wide and diverse range of individuals and organizations acting on a wide range of motivations—both market and nonmarket, state-based and nonstate.
Third, and likely most radical, new, and difficult for observers to believe, is the rise of effective, large-scale cooperative efforts—peer production of information, knowledge, and culture. These are typified by the emergence of free and open-source software. We are beginning to see the expansion of this model not only to our core software platforms, but beyond them into every domain of information and cultural production—and this book visits these in many different domains—from peer production of encyclopedias, to news and commentary, to immersive entertainment.
Benkler suggests that 20th century economic analysis largely—and mistakenly—ignores this growing sector of the 21st century economy. The implication is that strictly market-based analysis will become less and less relevant to the extent social production increases its share of value creation.
It is easy to miss these changes. They run against the grain of some of our most basic Economics 101 intuitions, intuitions honed in the industrial economy at a time when the only serious alternative seen was state Communism—an alternative almost universally considered unattractive today…
Human beings are, and always have been, diversely motivated beings. We act instrumentally, but also noninstrumentally. We act for material gain, but also for psychological well-being and gratification, and for social connectedness. There is nothing new or earth-shattering about this, except perhaps to some economists.
While the above is one hand a humorous commentary on the limitations of modern economics, it also points to a serious and potentially radical transformation in how human beings will create and exchange value in the 21st century.
In the industrial economy in general, and the industrial information economy as well, most opportunities to make things that were valuable and important to many people were constrained by the physical capital requirements of making them. From the steam engine to the assembly line, from the double-rotary printing press to the communications satellite, the capital constraints on action were such that simply wanting to do something was rarely a sufficient condition to enable one to do it. Financing the necessary physical capital, in turn, oriented the necessarily capital-intensive projects toward a production and organizational strategy that could justify the investments. In market economies, that meant orienting toward market production. In state-run economies, that meant orienting production toward the goals of the state bureaucracy. In either case, the practical individual freedom to cooperate with others in making things of value was limited by the extent of the capital requirements of production.
In the networked information economy, the physical capital required for production is broadly distributed throughout society. Personal computers and network connections are ubiquitous. This does not mean that they cannot be used for markets, or that individuals cease to seek market opportunities. It does mean, however, that whenever someone, somewhere, among the billion connected human beings, and ultimately among all those who will be connected, wants to make something that requires human creativity, a computer, and a network connection, he or she can do so—alone, or in cooperation with others. He or she already has the capital capacity necessary to do so; if not alone, then at least in cooperation with other individuals acting for complementary reasons. The result is that a good deal more that human beings value can now be done by individuals, who interact with each other socially, as human beings and as social beings, rather than as market actors through the price system.
Sometimes…these nonmarket collaborations can be better at motivating effort and can allow creative people to work on information projects more efficiently than would traditional market mechanisms and corporations. The result is a flourishing nonmarket sector of information, knowledge, and cultural production, based in the networked environment, and applied to anything that the many individuals connected to it can imagine. Its outputs, in turn, are not treated as exclusive property. They are instead subject to an increasingly robust ethic of open sharing, open for all others to build on, extend, and make their own.
Benkler doesn’t limit himself to economic matters. The roughly 250 pages comprising Part II of the book address the political, social and cultural implications of the technological and economic trends laid out in Part 1. I haven’t gotten through most of this section yet, but Benkler’s one-paragraph summary of it below suggests that it, like the sections I’ve already read, are well worth the time to read and ponder.
Part II of this book provides a detailed look at how the changes in the technological, economic, and social affordances of the networked information environment affect a series of core commitments of a wide range of liberal democracies. The basic claim is that the diversity of ways of organizing information production and use opens a range of possibilities for pursuing the core political values of liberal societies—individual freedom, a more genuinely participatory political system, a critical culture, and social justice.
The final section of the book begins with a chapter entitled “The Battle Over the Institutional Ecology of the Digital Environment.” In Chapter 1, Benkler sets the stage for this later discussion:
No benevolent historical force will inexorably lead this technological-economic moment to develop toward an open, diverse, liberal equilibrium. If the transformation I describe as possible occurs, it will lead to substantial redistribution of power and money from the twentieth-century industrial producers of information, culture, and communications—like Hollywood, the recording industry, and perhaps the broadcasters and some of the telecommunications services giants—to a combination of widely diffuse populations around the globe, and the market actors that will build the tools that make this population better able to produce its own information environment rather than buying it ready-made.
None of the industrial giants of yore are taking this reallocation lying down. The technology will not overcome their resistance through an insurmountable progressive impulse. The reorganization of production and the advances it can bring in freedom and justice will emerge, therefore, only as a result of social and political action aimed at protecting the new social patterns from the incumbents’ assaults. It is precisely to develop an understanding of what is at stake and why it is worth fighting for that I write this book. I offer no reassurances, however, that any of this will in fact come to pass.
The battle over the relative salience of the proprietary, industrial models of information production and exchange and the emerging networked information economy is being carried out in the domain of the institutional ecology of the digital environment. In a wide range of contexts, a similar set of institutional questions is being contested: To what extent will resources necessary for information production and exchange be governed as a commons, free for all to use and biased in their availability in favor of none? To what extent will these resources be entirely proprietary, and available only to those functioning within the market or within traditional forms of well-funded nonmarket action like the state and organized philanthropy?
We see this battle played out at all layers of the information environment: the physical devices and network channels necessary to communicate; the existing information and cultural resources out of which new statements must be made; and the logical resources—the software and standards—necessary to translate what human beings want to say to each other into signals that machines can process and transmit. Its central question is whether there will, or will not, be a core common infrastructure that is governed as a commons and therefore available to anyone who wishes to participate in the networked information environment outside of the market-based, proprietary framework.
…Each institutional framework—property and commons—allows for a certain freedom of action and a certain degree of predictability of access to resources. Their complementary coexistence and relative salience as institutional frameworks for action determine the relative reach of the market and the domain of nonmarket action, both individual and social, in the resources they govern and the activities that depend on access to those resources. Now that material conditions have enabled the emergence of greater scope for nonmarket action, the scope and existence of a core common infrastructure that includes the basic resources necessary to produce and exchange information will shape the degree to which individuals will be able to act in all the ways that I describe as central to the emergence of a networked information economy and the freedoms it makes possible.Posted by Mitch Shapiro at 5:43 PM | Print | Comments (0)
I knew this was coming…Microsoft’s TV division head Moishe Lichtman is stepping down, ostensibly for family reasons. A few months back, a big institutional investor called me looking for the names of candidates who could head up…Microsoft’s TV division.
Now it’s official, and it’s a sign of the times. First, Ray Ozzie is shaking up the out-of-step Redmond software giant, as this interesting article by Fortune’s David Kirkpatrick illustrates. While the shake-up is intended to whip Microsoft into fighting shape so that it can take on Internet giants Google and Yahoo, not to mention open-source software competition, it’s clearly reached into the TV division.
Microsoft’s TV division has long been a troubled unit in the company, starting off as, well, an affront to cable operators who were the intended customers of Microsoft’s interactive TV software. Microsoft’s engineers wouldn’t listen to the old RF-hands, and the ITV platforms the company built couldn’t work with cable’s architecture.
The company then repositioned its TV software into a more useable product and started aiming it at not only cable operators but telcos; Microsoft is now a leading supplier to both AT&T and Verizon in their IPTV efforts.
All is not well there, either. So it makes sense that Microsoft will rejigger its TV division — the company is pulling in as a replacement for Lichtman Enrique Rodriguez, an exec from the hotter-than-hot Xbox division,
Posted by Cynthia Brumfield at 11:42 AM | Print | Comments (0)
MediaPost’s Eric Sass has this piece today about how niche publishers are turning their expertise to video publishing, in essence becoming video channels. Primedia announced today that it will create a digital broadcast channel based on its Motor Trend online magazine.
While Motor Trend is aiming at the digital TV set, Make magazine is launching an online video channel called Make Faire using YouTube’s publishing platform. Google, YouTube and Brightcove (see a demo of the video channel we’re setting up at IP Media Monitor using Brightcove’s system) have already set up the video publishing infrastructure, making it easy for publishers to launch video channels.
Because YouTube and similar services like Google Video are so much less expensive and easier than establishing proprietary video-streaming websites, Torrone [Make associate editor Phil Torrone] predicted these platforms will be the wave of the future for smaller content providers, including printed magazine publishers. “Make will never invest the money and engineering in video that YouTube has - and why create your own proprietary video system when what they have works perfectly well?”Posted by Cynthia Brumfield at 10:16 AM | Print | Comments (0)
Courtesy of Andy Abramson, this Financial Times piece about how Skype censors its text messages in China. Skype founder Niklas Zennstrom admits that Skype’s joint venture in the country, Tom Online, filters out words, such as Dalai Lama, that the Chinese government doesn’t like.
Zennstrom claims that Skype is just following the law in China, the same way it follows the law in the western countries in which it operates.
“Tom had implemented a text filter, which is what everyone else in that market is doing,” said Mr Zennström. “Those are the regulations.” He claimed that compliance with Chinese censorship was no different from obeying rules governing business in western countries. China, along with the US and Germany, is one of Skype’s three biggest markets in terms of active users of its free telephony service, which routes encrypted calls between computers via the internet.
Yeah, well, last I checked, the U.S. and Germany don’t lock up their journalists and throw away the key.
Posted by Cynthia Brumfield at 9:00 AM | Print | Comments (1)Courtesy of Groklaw, this New Scientist article about a patent that Dutch technology provider Philips has landed. It’s a broadcast flag that will stop viewers from changing channels during commercials or from fast-forwarding through commercials on recorded programs.
Philips’ patent acknowledges that this may be “greatly resented by viewers” who could initially think their equipment has gone wrong. So it suggests the new system could throw up a warning on screen when it is enforcing advert viewing. The patent also suggests that the system could offer viewers the chance to pay a fee interactively to go back to skipping adverts.
That’s the bad news. The good news for U.S. residents is that Philips’ system only works with MHP (Multimedia Home Platform), a standard only used in Europe (for now anyway).
Posted by Cynthia Brumfield at 8:42 AM | Print | Comments (0)After only a few days, I’m convinced that everyone in the communications business must read Yochai Benkler’s “The Wealth of Networks.” Which is not to say I’ve actually read it…but I just ordered my copy and will dig in as soon as it arrives. (There’s a wiki for the book and it’s available for download at no charge under a creative commons license.)
So many people I respect, however, have commented on the book (see here and here and here.) The latest is Dave Weinberger, who offers a summary of a talk that Benkler gave about the book. Although it’s a serious tome with somewhat complex discourse, I wouldn’t let that discourage anyone from delving into what sounds like analysis that pulls it all together.
One point made by Benkler: the social production of content and information made available by the Internet is not a “fad” but a long-term trend. From Weinberger’s notes on Benkler’s talk:
There are new opportunities, he says, most importantly shifting from finished information and cultural goods to platforms for self-expression and collaboration. Social production is a fact, not a fad. It is “the critical long term shift caused by the Internet.” But it is a threat to, and threatened by, incumbent business models. Why should we care about the outcome of this political debate, he asks? Because of our core commitments to autonomy, democracy, and justice & development.
Peer production of content changes everything — the justice system, collective intelligence, and so much more. Our political system is even undergoing a radical overhaul because of the mass dispersion of information creation. Again from Weinberger’s notes:
Our democracy is a mass mediated public sphere. What do you get when you have peer production in such a democracy? You used to get The Pentagon Papers, which required several newspapers and the Supreme Court to get published. Now you get Bev Harris at BlackBoxVoting.org exposing Diebold. The Diebold code is opened up to public inspection. By the time Diebold sues the various places it’s been posted, it’s been distributed widely via email and Freenet and Overnet…Posted by Cynthia Brumfield at 8:15 AM | Print | Comments (0)
Any student of communications can tell you that p*rn blazes a path which all other media follow (even early naughty cave drawings may have been the precursor to written alphabets). VCRs and even the web itself were given a push by folks looking for easy, private access to adult programming.
The LA Times’ Dawn C. Chmielewski and Claire Hoffman have a piece today about adult film distributor Vivid, which will start selling downloadable-to-burn films via CinemaNow starting May 8. Unlike the rest of the, um, entertainment industry, Vivid will allow the DVDs burned to play on TV sets, something that mainstream Hollywood has avoided.
But, where p*rn goes, the rest of the business might follow.
Historically, the p*rn industry has adopted new technologies more nimbly than Hollywood. It embraced home video in the late 1970s, allowing people to bypass seedy theaters and watch the movies in their living rooms. Mainstream studios, by contrast, fought home video all the way to the Supreme Court before making it one of the most profitable pieces of their business.Posted by Cynthia Brumfield at 8:00 AM | Print | Comments (0)
For some reason, and perhaps it’s because Dave Sifry came out with his most recent stats on the growth of the blogosphere, there’s a flurry of recent interest by the mainstream press in blogging. And the common theme among these articles is: what are blogs worth from a traditional publishing standpoint?
The Wall Street Journal today has this amusing debate between publishing greybeard Alan Meckler and new media firebrand Jason Calcanis on the question of whether bloggers can make money. Meckler says no, Calcanis says yes but they both agree that it depends on how much traffic a blog attracts.
My favorite curmudgeon Scott Karp says that blogging is simply publishing and basic media economics 101. He says that if you generate the numbers, you will make money. “The better the blog, the bigger the audience, the better the business,” Karp writes.
But, unlike traditional publishing, blogging is a prestige thing, a way to get your name out on the Internet and establish your bona fides, as this Boston Globe piece pointed out a few days ago. This is a new aspect to publishing that didn’t really exist until the ascendancy of blogging. Sure, prior to the rise of the web some folks entered publishing in the hopes of greater glory, but the costs of printing and distribution pretty much weeded out vanity publishers.
Finally, the Guardian had this piece yesterday about the disproportionate impact of blogs on elite opinion makers.
“That’s exactly right,” said Glenn Reynolds, author of An Army of Davids, which explores the explosion in web punditry. “Bloggers and blog-readers are ‘influentials’ - the minority that pays attention to events outside of political and news cycles. They also tend on average to be better off, better educated and, more importantly, employed.”
From this vantage point, blogs are much more akin to old-fashioned, high-priced dead-tree newsletters. Newsletter publishers (how quaintly archaic that terms seems) used to target niche markets, put out a steady stream of insiderish content ignored by the consumer and trade press and charge through the nose for it. Now, however, blogs are starting to fill that niche.
Update: Did the Wall Street Journal take a page out of Steve Rubel’s book? Steve ran two interviews a while ago with both Alan Meckler and Jason Calcanis on the subject of…whether blogs can make money? Here’s Meckler’s interview and here’s Calacanis’ interview.
Posted by Cynthia Brumfield at 7:07 AM | Print | Comments (1)
Blogs We Read
