From Chicago, Northwestern University and Wicker Park

Hello from the Intelligent Information Lab at Northwestern University’s Ford Design Center. It’s a beautiful building on a beautiful campus and I got to bike all around it and swim in the lake. The Chicago / Evanston beaches are nicer than many in LA. To my surprise the water was still colder than the Pacific but refreshing nonetheless!

My client here is a spin-out from the Info Lab, Beyond Broadcast Media. They specialize in automating the laborious process of supplementing media with highly relevant information. For example, you're watching your favorite Emmy award winning program, MAD MEN. The BBCast Media system has sifted through all the metadata associated with all of the episodes of Mad Men no mater how poor it may be. The system has structured the data into a “canonical” form and from that it goes on to create carefully structured queries that return incredibly contextually relevant results based upon pre-determined domains such as additional videos, fansites, news, blogs and shopping, I got a demo of their latest software tools for managing media related metadata. We also discussed how important metadata is to the user experience and to monetizing almost any form of media.

Earlier in the day I met with Associate Professor Michael Smith, Director of the Media Management Program at the Kellogg Graduate School of Management. We discussed how media companies need to adopt new strategies to survive including institutionalizing innovation, giving next generation workers more opportunities, making partnerships and placing a business focus beyond just numerical performance goals.

I also met with Justin Kerr, the Executive Director and Publisher of Site of Broad Shoulders (www.sobs.org). A great not-for-profit niche site dedicated to publishing Chicagoland Artists. They are about to launch an Internet radio service. They have an interesting work style whereby everyone gets together weekly to “produce” the site. While Justin talks content and editorial, Jake Eldridge, CEO, tweaks the software and the Content Management System.

Musings on Music Biz

My mind is still on the Music biz these days. Probably because I am feeling depressed about not being at MIDEM in Cannes this year, since it was so great to be there last year. There is so much dynamic vitality in the music world from so many points-of-view. There is an abundance of new digital music services and devices and easy access to music of all kinds. Music as a social network means and medium is enjoying exponential growth, i.e. imeem, MyStrands etc. All this makes the massively depressing ’07 music sales stats even more ironic. The numbers cited and the ’08 projections are even more dismal than most pessimists predicted.

The Economist 10 Jan Articles “From Major To Minor” concludes: “Universal and its fellow majors may never earn anything like as much from partnership with device-makers as they did from physical formats. Some among their number, indeed, may not survive.”

The article posits a trifecta of woe for CD sales:
1. Reduced retail floor space due to reduced sales resulting in further reductions
2. Decreasing Label budgets for releasing new records resulting in further diminution of the biz
3. A reduction in capitalization and investment due to poor returns.

This vicious cycle is likely to make 2008 feel like dropping off a cliff to the recorded music industry and bolster competitive efforts by companies such as Live Nation and artists that are going direct.

The article reports the Nielsen SoundScan number of US CD sales dropping 19%. Both The Economist and Digital Music News report that the 2007 sales were just as bleak worldwide:
• Spain: -22%
• Canada: -21%
• France: -17%
• Australia: -14%
• Italy: -12%

NAPSTER REDUX
In an inevitable move, one of the majors, WMG, has gone after the new Napster (by which I mean the old Napster that started the MP3 download craze and was successfully shut down in July 2001), SeeqPod.

Seeqpod is in some ways easier, better, and even more pernicious to the established music industry than Napster. It allows you to search for any music or video by artist or title, play it instantly, store it onto a playlist and share the playlists.

In its 57 page complaint to the California Central District Court, The Warner Music Group (Warner Brothers, Atlantic, Elecktra and Rhino) does not mince any words. They are going after the Seeqpod Inc. and their “Angel” investors for both direct and contributory infringement for the max $150,000 per instance of which there are 100s of thousands. They plainly articulate how Seeqpod is egregiously enriching itself by growing its user base at the direct expense of the copyright holders.
SeeqPod has attempted to play dumb by claiming that it is only a search engine like Google, albeit specialized for the deep vertical media niches. True, Seeqpod does not store nor serve, nor even maintain an (Old) Napster-like directory. It merely points to extant mp3 files and provides a convenient means to store your searches and play them.

This will be an interesting case since it may also have implications for the Googles of the world who, it could be argued, also enrich themselves by searching for copyrighted work.

The labels measure how much a music service impacts them by how much of a replacement that service is for an unfettered, unrestricted CD. Indeed with SeeqPod’s iPhone app and ubiquitous edge network access it is not far off.

Thinking Globally: Toms Shoes

Ever since reading Thomas Friedman’s THE WORLD IS FLAT, I have been more aware of “globalization”. Ever since I took a course in college from Buckminster Fuller I have been aware of the distribution of wealth, poverty and resources and that the “Spaceship Earth” would reach its limits. Somewhere studying bioscience I learnt to “think globally and act locally” as recommended by the great microbiologist Renee Dubos. Today I got a glimpse of a working example of all of the above.

When you walk into the HQ of TOMS SHOES (www.tomsshoes.com) you see a chaotic warehouse with a lobby decorated floor to ceiling with photographs of smiling kids, and drawings of shoes made by kids. The conference room has the detritus of ideation on its flip boards as well a few pairs of colorful, casual, canvas shoes scattered around the table. The new line is being designed I am told by Candice Wolfswinkle, the newly hired executive in charge of the FRIENDS OF TOMS Foundation, who was kind enough to spontaneously show me around.

Referring to a warehouse half full of TOMS Shoes, in a wide variety of styles, she explains how fulfillment moved from a small apartment to this warehouse and is now being moved offsite to a fulfillment center to keep up with the demand. The warehouse is now being used for office space. Desks are lined up in two ragged rows separated by makeshift curtains hung form the high ceiling. No one seems to mind the décor. A cadre of interns and employees seem to be happily at work designing, manufacturing and selling casual shoes so that they can give them away to children that need them.

Since Blake Mycoskie founded TOMS SHOES in February 2006, he has stuck to one basic principle, sell a pair of shoes and give a pair to a child who needs one, in person. So simple it works. Inspired by an inexpensive, casual shoe style he saw being worn while on vacation in Argentina, in juxtaposition with an overwhelming number of impoverished shoeless children, Blake had the idea and started his company to provide shoes for tomorrow for kids. Tens of thousands of pairs later, Blake and TOMS shoes have been featured in PEOPLE, TIME, Vogue and Oprah Magazine. With no qualifications from the fashion business, Mr. Mycoskie is fast approaching shoe mogul status as the department store orders have spiked demand.

“We tried to get them made in Argentina.” Says Candice, however the factories just weren’t up to our labor and quality standards.” So you guessed it, the shoes are manufactured in China, so that they can be sold in the USA so that thousands of pairs can be shipped and fitted to children in impoverished areas in South America, South Africa and even back in the USA. Turns out a pair shoes can make a great deal of difference. You might need them to attend school and to prevent crippling infections.

I am greatly impressed by the evident sense of purpose that permeates the Santa Monica based HQ and former warehouse, by the difference this simple plan is making in tens of thousands of lives, and by the shear globalizing randomness of the idea. I am inspired to give something back myself should I be fortunate enough to come up with an idea as good as this.

History of Media Tech: THUNDERSTRUCK

After my Co-Instructor Mark’s presentation on the history of content and subsequent discussions, my interest was piqued about a History book I had heard about by Erik Larson; THUNDERSTRUCK. Mr. Larson authored another great read on the history of my home city, Chicago, entitled DEVIL IN THE WHITE CITY.

To the point, THUNDERSTRUCK details the history of “wireless” AKA radio from the discovery of “Hertzian” waves and the intrigue and high drama around Marconi’s invention of the wireless in turn of the 19th Century London. Amazing how history repeats itself. In the 1890s the scientific establishment was intrigued with discoveries about the electromagnetic spectrum but did not recognize its practical value until Guglielmo Marconi (1874-1937) invented the first devices usable for wireless telegraphy. Six months after his company was established in 1897 at the age of 23 Marconi’s stock was worth about $20 million in today’s dollars. Forthwith he began establishing a “standard” and imposing exclusivity conditions on his contracts including the condition that his shipboard installations were only allowed to communicate with other Marconi stations and that no other wireless vendors could be used for 14 years. Marconi demonstrated the first transatlantic communication in 1901 defying the widely held belief that “electrical” waves could only travel in straight lines. It wasn’t until 1907 that the “Wireless” was in widespread use paving the way for Radio. Similarly the Internet and was an academic and quasi military technical feat until the invention of HTML, the World Wide Web and the IPO of Netscape.

A noteworthy mention in the book was from one of Marconi’s competitors who was fast on his heels with wireless inventions but had a greater vision. In the June 1890 edition of The Century Magazine, Nikola Tesla wrote, “We shall be able to communicate with one another instantly irrespective of distance,” “Not only this, but through television and telephone we shall see and hear one another as perfectly as though we were face to face.” There you go, the first historical mention of Television.

An aside: Marconi’s fellow countryman Allesandro Volta (1745-1827) demonstrated the first electrochemical battery in 1800. The first rechargeable lead-acid battery came in 1859. Battery technology lags far behind electronics.

The parallels to today strike me. As Rebekha from class has pointed out to Mark and I, The world divided into competing Television standards, namely NTSC, PAL and SECAM which have created barriers to global broadcasting. Consumer DVD players are region specific so that international territorial distribution boundaries can be respected. The list of digital media standards and variants is formidable: MPEG2, MPEG4, H.264 (a variation of MPEG 4), MP3, AAC, AIFF, WMC, AVI, AVC, Quicktime, Real etc. Telecom and IP related standards are even more numerous and the distant cousins to Marconi’s wireless standards are even more prolific including a variety of competing system for broadband wireless (AKA 3G) and mobile TV. Competing Mobile TV schemes include South Korea’s DMB-T (Digital Multimedia Broadcasting – Terrestrial which can also work via DMB – S for satellite), Qualcomm’s Media Flo, and Panasonics Mobile Handheld offering. What works for 1:1 Internet connectivity is ill suited for the 1 to many nature of Television broadcasting.

The saving grace of digital files is that they are easily compressed, converted, transcoded or otherwise manipulated using software with the caveat that any conversion can result in some loss of data so that a digital “master” must be maintained. The master is immune to the analog foibles of degradation, noise and other forms of degeneration and remains pristine provided the digital recording medium remains intact, which certainly should not be taken for granted whether optical or magnetic.

On Privacy, Not

Privacy has been an ongoing theme of discussion in several class sessions. Students have expressed concern about agreeing to the onerous terms-of-service form the likes of Google. Google, Tivo, AOL, Amazon, Facebook, and just about any Internet service you register for, collects mountains of data on its users. Clickstream data is collected on just about any site you visit, with cookies used for identification. What the corporate overseers do with this data has often been called into question. Allegedly registered user data is applied “anonymously” for targeting ads, metrics and “personalization” features, however monumental breaches in security have been well publicized.

In spite of egregious errors and some corporate misconduct, usually due to incompetence rather than malfesciance, I feel that allowing Google and the like to spy on me is the least of my computer privacy worries. Malware, SpyWare, phishing, and other forms of criminal computer identity theft are much more worrisome.

But computer identity theft can be mitigated by firewalls, antivirus/anti-malware software, email filters, and just plain being careful.

Of much greater worry is data collected by financial and credit organizations on every credit card and financial transaction of every kind. Data is collected and stored every time you use your social security number, drivers license, mobile phone, home address bank account, every time you check in or out of a hotel, get a prescription filled, change addresses or get a car. The real trouble is with data aggregators that can “match” data from an assortment of databases and assemble a dossier on millions of us. What is even worse is the existence of organizations that sell personal data online and continue using methods like “pretexting”, impersonating a legitimate authority, to obtain personal information. It’s bad enough that the laughably named US Patriot Act removes any illusion of protection from big brother, we also have to watch our backs form the likes of Intelius, bestpeoplesearch, searchpublicinfo and docusearch. I haven’t even begun to scare myself about what the major credit beaureas like Experian and TRW are doing with my data. I know from experience the lingering nightmare of ID theft, having seen a friend loose her passport to a burglar. It just as easily could have been myself as the Apartment we shared was ransacked.

If you really want to worry, look no further than the mile wide breaches in computer security that have led to the loss of millions of SS#s and credit card numbers, many of which are inside jobs resulting for the theft of data or simply stupidity.

Digital conveniences such as WiFi and multi-gigabyte SD Flash drives are also a feast for thieves and a constant threat. A few gigs is plenty of room for millions of credit card numbers and credit histories, let alone a terabyte drive that fits in a small pocket or purse.

The future looks bright for security and ID theft countermeasures. Keep fraud alerts on everything, check your credit reports, lock up your files. Resist allowing RFID tags on Passports and being surgically implanted upon birth. I support National, Photo, biometric ID cards. At least identity theft will be more difficult, the bad guys will have a harder time with aliases and slipping past borders, and when your being spied on they will know its really you using your debit card at Starbucks and holding up the line.

UCLA Extension 405.23

I am co-teaching another course at UCLA Extension this quarter. It has its own blog at
uclamediatech.blogspot.com