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Confession time. Here's what I dream about at night:
Every wannabe media mogul has had this fantasy. You’ve won the lottery of lotteries and now have a cool $15 billion ($15,000,000,000) sitting in your bank account. So what media company would you buy?
READ ON to learn why Facebook's $15 billion valuation is the most absurd economic digital development since AOL backed into Time Warner at the climax of the Web 1.0 irrational exuberance.
Yes, I've seen the future of the Internet and it is summarized by the most prosaic of arithmetical truths: Web 1.0 + Web 2.0 = Web 3.0. The future of the Internet is the combination of the traditional media expertise of Web 1.0 media with the user-generated democracy of the Web 2.0 revolution. That represents the best of all worlds and is manifested by the deal announced on Wednesday in Frankfurt between Bertelsmann and Wikipedia.
Bertelsmann is, of course, the quintessential authoritative media company -- the German owned international empire of publishing houses (Random House), record labels (BMG), magazine publishers (Gruner & Jahr) and broadcasting companies (RTL Group). The user-generated information website Wikipedia, in contrast -- with its absence of central authorities, controls or formal editors -- is the anti Bertelsmann media company.
So what happens when you combine the best of Bertelsmann and Wikipedia?
You get Bertelsmann's plan to publish the German version of Wikipedia's content in a one-volume physical book. Now, of course, the current information on the German language Wikipedia site would fill a multi-volume set of encyclopedias. So what the deal involves is editors at the Bertelsmann subsidary Wissen Media acting as the expert curators of Wikipedia's user-generated content. Professional editors, then, will pick 50,000 commonly researched keywords from the 740,000 entries on Wikipedia and then standardize these entries as short definitions in what will be called a Lexical Yearbook which will sell for 20 euros.
Rather than the Lexical, maybe they should call it the Lyrical Yearbook. It certainly represents a lyrical marriage of the best of Web 1.0 and Web 2.0. What I particularly like about the deal is that 1 euro from every Yearbook sale will be donated to Wikimedia Deutschland. I just hope that the Germans figure out a way to financially reward Wikipedia editors for their labor.
This Lexical Yearbook -- and not unrealisable abstractions like the Semantic Web -- is the real commercial future of the Internet. Web 1.0 + Web 2.0 = Web 3.0. The future, then, is a mash-up of Bertelsmann and Wikipedia. Everybody wins. Trust the practical Germans to transform clever American innovation into viable commercial product. Now can we expect a similar deal between The Frankfurter Allgemeine Zeitung and the blogosphere to produce a a paper newsblog?
Last October, at the memorable News Xchange event in Berlin, the British broadcaster Jon Snow argued that "one of the greatest responsibilities to humanity" is for us, as news media, to report Iran accurately. He was right then and he's even more correct now.
So where is the news media (Krugman?) in response to Hillary Clinton's remarks this week about obliterating Iran? Who is methodically thinking about the consequences of these words:
"I want the Iranians to know that if I'm the president, we will attack Iran... We would be able to totally obliterate them"?
Iran is a republic slightly larger than Alaska (1,648 million sq km) with a population of 66 million. Over 7 million Iranians are under 14. The average age of Iranians is 26.4 years-old. 51% of the people of Iran are of Persian ethnicity, the other major ethnic groups include Azeris (24%), Gilaki and Mazandarani (8%), Kurds (7%) and Arabs (3%). 98% of Iranians are Moslem (Shia 89%, Sunni 9%), the rest are Zoroastrian, Jewish, Christian and Baha'i. 58% of Iranians speak Persian, the majority of the rest speak Turkic (26%), Kurdish (7%) and Arabic (3%). That's a lot of people, languages, religions and cultures.
Is this what Hillary wants to obliterate?
I used to support her, but this is a sentence too far for me. She is transforming herself into Hirohito's Japan in the late summer of 1945. Maybe we need to incinerate her before she obliterates all of us.
How to explain Apple's 51% jump in Mac sales for Q1 of 2008? When asked yesterday to make sense of the 2.3 million Mac computers sold in the first three months of this year, Steve Jobs was uncharacteristically humble:
“We’re not economists, so we don’t have any more insight than everyone else, but there were sure a lot of people in our stores last quarter.”
But it's not just the excellent Apple stores that account for the remarkable sales success of Mac computers this year. Woody Allen got it right when said that 80% of success is just showing up. Jobs has continued to do what he's been doing for thirty now -- showing up by building high quality personal computers that are easy for people to use. Meanwhile, Microsoft have failed to show up. That 51% increase in the purchase of new Mac computers is a direct consequence of Microsoft's Vista fiasco. In contrast with Apple's OS X operating system, Vista is an absolute disaster; it's perhaps very worst consumer electronics products that I've ever had the misfortune to use.
I've recently got two new laptops -- a Mac and a PC running Vista. Even though I'm not a regular Mac use, the OS X computer, with its intuitive operating system, worked delightfully right of the box. Whereas the Vista machine has caused me all sorts of incredibly irritating problems including not working with my old printer. Most tellingly, when I switch on my Mac, it takes no more than 30 seconds for the machine to boot up. But when I turn on the PC, it takes several minutes to boot and then the computer presents me with a serious of counter-intuitive choices that seem designed to confuse and frustrate me.
It's doesn't take the genius of a Steve Jobs or a Woody Allen to figure this one out. I'm no Mac cultist, but it's obvious that people prefer quality and convenience to crap and inconconvenience. In the personal computer business, 80% of success is just switching on. That's why Mac sales increased 51% this quarter and why Apple now have a 6% share of the American personal computer market. And that's also why the final final battle of the great Apple-Microsoft war has yet to be fought.
Check out the May issue of Prospect magazine for my review of Charlie Leadbeater's We-Think, Clay Shirky's Here Comes Everybody and Lee Siegel's Rage Against the Machine. You'll have to pay the read it -- but this is a smart investment because reading Prospect will make you wiser about the world.
Speaking of serious wisdom, Prospect is once again running a readers' poll to discover the world's leading public intellectual. You can vote here from a long short list of 100. Last time around, in 2005, Noam Chomsky was elected, beating Umberto Eco into a distant second place. But things have changed in the public intellectual business over the last three years. We are now living in a Christopher Hitchens world -- as proven by Prospect's rather dodgy decision to put Alexander Linklater's portrait of Hitchens on the cover of its public intellectual issue. In 2005, Hitchens came in fifth, two places behind co-atheist Richard Dawkins. But that was before God is Great and the Hitchification of Anglo-American media.
Who would get my vote? Certainly not Chomsky, a crazy fossil of the archaic American left miraculously brought back to life by the idiocy of the Bush regime. Hitchens is unChomsky: a work-in-progress, omnivorous, always-on. He's my own personal role-model of a subverter of subversions -- although, like Dawkins, I think he's a bit too self-inflated with comfortable English common-sense to be the world's leading intellectual. Jurgen Habermas (#6 in 2005) is full of anything but common sense, but his problem is just the opposite -- too much academic theory and not enough clarity. If you want an American king, then how about New York Times columnist Paul Krugman (#7 in 2005) -- who wins my vote for the world's most public-spirited and coherent economist.
In 2005, a crowd of 20,000 people voted in the Prospect poll. The election of the crazy fossil Chomsky (who got 4,800 votes) doesn't speak highly of the wisdom of that crowd. Anyone-but-Chomsky is my candidate, with Hitchens as the odds-on favorite to be crowned as the next intellectual master of the universe.
Of all the thundering Web 2.0 prophets, the only one I haven't had the honor of formally debating is Moses himself, Tim O'Reilly. It was O'Reilly and his marketing mavens at O'Reilly Media, of course, who, back in the primordial soup of 2004, invented the term "Web 2.0". And it was O'Reilly who, in his September 2005 essay "What is Web 2.0", brilliantly juxtaposed the core principles of Web 1.0 with those of Web 2.0. Without O'Reilly, I couldn't and wouldn't have written Cult. Not only did his essay profoundly enlighten me about the revolutionary qualities of Web 2.0, but also his generous invitation to FOO Camp in September 2004 resulted in a 48-hour epiphany that transformed me from believer into sceptic.
So I'm thrilled that I've finally had a kind of debate with old Moses O'Reilly. He and I found ourselves implicitly arguing with one another in a really incisive new documentary entitled "The Truth According to Wikipedia" filmed by the Dutch television show VPRO. Many of the Web 2.0 prophets are featured in the documentary Including Jimmy Wales, Charlie Leadbeater and Chris Pirrilo. But it's an unshaven O'Reilly, a grizzled alpha meme producer if there was ever an grizzled alpha meme producer, who dominates the Web 2.0 team.
So anyway, Tim, I need to borrow your wisdom again. Having watched "The Truth According to Wikipedia" a new truth has dawned on me. As I'm sure you know, the truth about Web 2.0 is that the lights are out and the party is over. Web 2.0: circa 2000-2008 RIP. The whole "web as platform" thing has played itself out. We all now know its technological strengths and weaknesses, its cultural accomplishments and failures, its economic appearance and reality. We are back in 1999/2000 again -- in no-man's land, historically orphaned, in-between epochs.
So, Tim, what comes next? What is the next big thing after Web 2.0?
Now I know you are way too prophetic to call it "Web 3.0" -- but it does need a catchy name so we can package it up for the media. And it needs ideas, organizing principles, a central theme. Is the new new Internet thing about technology, culture, politics or society? What will it do to America? And how will it change the world?
I knew the original version of Condoleezza Rice back in 1984 when she was a xenophobe political scientist at Stanford warning us about the military threat of the Soviet empire. She wasn't very brave then. And she's no braver now.
Once a paranoid Sovietologist always one, I fear. The world might have changed since 1984, but Rice is still building her brand around the same imaginary threat of violent foreigners. Back then, she wrote self-serving books like The Soviet Union and the Czech Army, 1948-1983: Uncertain Allegiance which terrified us about the military threat of the evil empire. Substitute the Soviet Union for Hamas and we might as well be back in 1984 when, if we were to believe xenophobes like Rice, the Russians were an expansionist military power seeking to rule the world. Here's Rice's unbelievably stupid remarks about Jimmy Carter's brave attempt to bring Hamas into the peace process:
"I just don't want there to be any confusion. The United States is not going to deal with Hamas and we had certainly told President Carter that we did not think meeting with Hamas was going to help" further a political settlement between Israel and the Palestinians."
But my dear Condeleezza -- how can there be any "political settlement" between Israel and the Palestinians if you refuse to speak to the most popular political organization in Palestine? Hamas is no more or less a "terrorist" organization than the Palestinian Authority or, for that matter, either Hezbollah or your ever-shifting political proxies in Iraq. Even you know that. It's time to take some real risks in the Middle East. Be brave for once in your life. Start by talking to the hard men inside Hamas. Who knows, maybe the diplomatic road to Tehran begins in Gaza City.
Maybe the future of music isn't quite as dire as I once thought. First, we are seeing ever increasingly innovative business ideas for financing musical talent. As I discuss in my London Independent column today, I really like the Sellaband and Slicethepie models which provide music lovers with the business infrastructure to invest in and take ownership stakes in artists. Expect to see this model extend into other entertainment industries like sports and publishing, where fans and readers often have better judgment than traditional managers.
Then there's the renaissance in the live music business which may end up dwarfing the collapse of the recorded music industry. In the Spring 2008 issue of Soho Magazine, David Glick, the founder of the investment fund Edge Group, argues that we might be on the brink on a new golden age for the music business:
The fact is that at a time when newspapers are full of reports of supposed collapse and ruination and choas in the record business, there has never been a greater interest from investors in putting their cash into it. From private equity company Terra Firma's 2.4 billion UK sterling purchase of EMI last year and my own company Edge Group's 25 billion UK sterling fund investing in live music, to The Verve and Klaxon's manager Jazz Summers recently-announced Power Amp Music Fund, there suddenly seems to be an outpouring of money from investors toward music.
And it's live music where Glick believes that the real business opportunity lies for entrepreneurs. He argues this extends from "covermounts" and "ad-supported music models" to "high-end corporate gigs offering the wealthy select few the opportunity to get up-close-and-personal with the stars in return for often eye-popping ticket prices."
So while the future of music may not be quite as rosily democratic as the Web 2.0 optimists would have us believe, it also may not be quite as bleak as pessimists like myself have been arguing. What has emerged unscathed from the wreckage of the recorded music industry is the physical value of the music artist. The copy might well be dead, but this, ironically, has only added more economic value to the act of playing live music.
It's nice to be wrong sometimes. Now I've got good reason to be cheerful about the future of music.
Summer, Buddy Holly, the working folly
Good golly Miss Molly and boats
Hammersmith Palais, the Bolshoi Ballet
Jump back in the alley and nanny goats
18-wheeler Scammels, Domenecker camels
All other mammals plus equal votes
Seeing Piccadilly, Fanny Smith and Willy
Being rather silly, and porridge oats
A bit of grin and bear it, a bit of come and share it
You're welcome, we can spare it - yellow socks
Too short to be haughty, too nutty to be naughty
Going on 40 - no electric shocks
The juice of the carrot, the smile of the parrot
A little drop of claret - anything that rocks
Elvis and Scotty, days when I ain't spotty,
Sitting on the potty - curing smallpox
Reasons to be cheerful part 3
Reasons to be cheerful part 3
Reasons to be cheerful part 3
Reasons to be cheerful part 3
The story is so deliciously absurd that I could have made it up myself. But I didn't -- it's all-too-true and reveals the tragically farcical truth about the Web 2.0 economy.
The cult Internet video show Break a Leg is one of new media's big hits with over 2 million views on YouTube, 500,000 views on Blip.tv, 100,000 views on Metacafe plus many more thousands on their own website. It's an "Office" style 30 minute ironic comedy written and produced by the brothers Baranovksy -- Yuri and Vlad, a couple of twenty-something San Francisco based Web dudes. Cool, eh? To the Web 2.0 crowd, of course, Break a Leg is way more than cool -- it's totally awesome since it represents the end of mainstream media, the long tail economy blah blah
blah. So, any dude with half a brain would presume that Yuri and Vlad must be laughing all the way to the digital bank, especially since Yuri told the Wall Street Journal last year that each 30 minute episode cost only $400 to make (meaning that they must have paid their actors and crew close to zero for their work).
Wipe that smile off your face -- rather than an ironic comedy, Break a Leg is actually a absurd tragedy for those poor dudeskis Yuri and Vlad who recently confessed that in the two years of making nine episodes of their high definition show, they've only received $2,500 in revenue. $2,500 :) -- $1,600 from YouTube partner program, $100 from Metacafe (which hasn't been paid) and $100 from Blip.tv. Awesome, eh? Even I can do the economics here -- 9 x $400 = $3,600. That means that, in spite of their over 3 million viewers, Yuri and Vlad have made a loss of $1,100 (or really $1,600 because of the outstanding Metacafe debt) from their two years of creative work.
So if the brothers Baranovksy, their crew and their actors aren't being rewarded for their creative labor, who is actually economically profiting from Break a Leg? The answer, of course, is YouTube, Metacafe and Blip.tv which are all both selling advertising against this content and also using all these page-views to add to their own market valuations. Multiply this Break a Leg story several thousand times and you get to understand why Google paid $1.65 billion for YouTube. This is the nasty little truth at the heart of the Web 2.0 economy. Nobody is winning except a tiny group of full-brained technology dudes who are laughing all the way to their Silicon Valley banks.
And my advice to Yuri and Vlad? Go back to your cultural roots, boyskis. Hitchcock showed us that San Francisco comedies are, in fact, quite tragic. Creative guys like you are the Underground Men of our glorious new Internet economy. For your next show, perhaps you should remix Dostoievski. Do Crime and Punishment 2.0. Then, at least, your message will conform to the new medium.
What a bloody citizen-farce. The 61 year-old "citizen-blogger" who revealed Obama's small town America remarks to a closed group of San Francisco donors is called Mayhill Fowler. She "works" for OffTheBus.Net, the citizen-newspaper which obviously takes advantage of clueless alter-kuckers like Fowler for their "news". Fowler, of course, shouldn't have revealed Obama's off-the-record remarks. But then she's a self-acknowledged dabbler rather than a trained journalist, isn't paid for her work and has no traditional editor at the exploitative OffTheBus. In the end, the New York Times tells us, she decided to go public with the grenade of a story after talking with her husband who told her to publish it because it was "newsworthy."
Then there's Jeff Rosen, the NYU citizen-academic responsible for OffTheBus. Justifying his decision to publish Fowler's piece, he wrote on his blog:
"we knew there could be problems with this approach and possible disputes with the campaigns. But we felt that participants in politics had a right to report on what they saw and heard themselves, not as journalists claiming no attachments but as citizens with attachments who were relinquishing none of their rights."
Huh? Citizen-garbage in, citizen-garbage out. Pity the poor kids at NYU who have to listen to such sanctimonious citizen-smut from Rosen on a daily basis. Don't dress this up in doublespeak about "citizens with attachments", Jeff. You got a hot story by accident and ran with it -- even though any journalist with an ounce of professional credibility would had the good sense to kill it. End of story.
Meanwhile, Arianna Huffington, the citizen-mogul founder of the Huffington Post, is laughing all the way to the citizen-bank. OffTheBus fed the piece to her uber-blog and a few hours later, bingo, it had 250,000 views. According to The Times, Huffington "cleared the post by cellphone while aboard David Geffen's yacht in Tahiti." At least this Santa Monica based citizen-voice of the American working class takes her own cellphone calls. Perhaps now she knows what it feels like to live in small town America.
