Tim Peterson

Dec 052007
 

Here is a development that seems like a logical progression in onslaught against all middlemen  – bands going after scalpers. We can probably expect producers of content to get testier at middlemen profiting from their efforts.

There are problems, though, for bands in their efforts to go after scalpers and middlemen services such as StubHub. Resellers of concert tickets have long been making a fortune, and have created a two-tiered concert system – the rich and well-connected paying what the market will bear by going to middlemen, and “true fans” (the younger and those with expendable time) paying in time by waiting on line or online for their face-price tickets. Because the young generally have more time than money, they dominate the second group. Bands can eliminate this two-tiered system most effectively by hiking prices to market rate. The dominant belief is that letting the market decide might work for Streisand and her fans who tend to be older and quite wealthy, but won’t work for bands with young followers and less disposable income. This dominant belief is wrong.

Letting market forces dictate ticket prices would certainly prove more lucrative for bands today who derive ever-increasing revenue from live shows as opposed to record sales. Enforcement against middlemen does not actually eliminate black market demand, but instead forces it into venues like Craig’s List, a bizarre online bazaar of shadowy and often dishonest characters hawking everything from clothing and furniture to scalped tickets and prostitution. Caveat emptor. Letting the market dictate prices would largely eliminate this black market, along with the counterfeiting that goes along with black market pricing. The fear that the wealthy are going to scoop up all the tickets is real but probably unfounded for most bands. After all, how many investment bankers are going to swamp the next Severe Torture show? The economics for a band with wide, cross-cultural and generation appeal (think U2), might be different, though. A market system would presumably drive prices into the stratosphere, and with wealthier and older crowds, U2 might need a different mix of enforcement and market to achieve the right profit-demographic mix.

The real winners of this new effort? The lawyers. Because music industry lawyers are seeking to enforce the fine print on the back of tickets giving them the right to dictate resale terms, ” (A) lot of lawyers are going to make a lot of money,” says the article.

Nov 222007
 

Fascinating article about virtual mobs and internet vigilante justice.

Lori Drew, a mother, goes online and creates a fake MySpace account, pretending to be a teenage boy. She does this specifically to befriend Megan Meier (her daughter’s friend and daughter of a neighbor) in order to get information about her own daughter. Somewhere along the line, Drew turns on young Ms. Meier and berates her. Ms. Meier – tragically fragile – then commits suicide. The dead girl’s father finds out about his bullying neighbor’s apparent role in his daughter’s death, and in a spasm of righteous rage, destroys the Drew’s foosball table. The Drews then press police charges against the grief-stricken father. Internet vigilante Sarah Wells finds out, does some research, and organizes a virtual mob whose fury has real world consequences – enough so that police have increased their patrols around the Drews’ residence.

The facts here seem pretty egregious, but the key word is “seem.” Mobs are not particularly known to be careful fact-finders nor dispassionate dispensers of justice. Are we entering an age of virtual witch trials and online cultural justice when the real world fails to mete out subjectively appropriate punishment? And with the anonymity of the internet, do mobs have even less of a sense of fair play?

Aside from the obvious internet cultural issues stand some fascinating legal issues. There is a tort law concept known as the “eggshell skull,” where those committing torts are responsible for all consequences flowing from the injurious acts, even if the victim suffers from unusually high damages from the acts. Did Drew have reason to know how emotionally fragile Ms. Meier was? Was the bullying pervasive and outrageous? It would seem that Papa Meier could have a cause of action against Drew, but what about free speech?

And check out the end of the article – in an ironic twist, Sarah Wells is tabbed a “vigilante” by a counter-vigilante, who posts personal information of Wells on the internet. Great read.

Nov 212007
 

With Thanksgiving approaching and some students already heading out of town, Columbia Journalism School paraded a series of professors in front of an auditorium of students this afternoon to entice and inform students regarding their upcoming choices for spring semester. Each professor got a few minutes to detail their classes and make a personal pitch for the assembled students to select their courses.

Most Columbia Journalism students are fulltimers in for one year only, so institutional memory of the possibilities can be found in one of only a few places – class evaluations whose written contents are specifically withheld by the administration, the hard-to-pin part-timers, and the occasional unguarded faculty member, whose motivations can range from angelic to Machiavellian. And with only this semester to choose before graduation, a group of us poured over tonight’s handouts in the dark corners of a local beer & burger joint to weigh our options. Some thoughts:

1. In addition to completing a Master’s Project, each student is required to take one six credit seminar, one six credit workshop, and one three credit elective. Tough choices all around. My New Media Master’s Project seems to lock me into a New Media Workshop – not a bad thing, but the overcrowding and on-the-fly feel to the New Media courseload has left feelings of unease among some of the concentrators, particularly with so many tried-and-true Workshop offerings for the taking.

2. Courses are selected on a balloting system – select your top three choices for each category and you will assuredly get one of your three. But with some courses historically tougher to get into than others, gamesmanship opportunities abound! For example, let’s say I want to take “Sports Journalism” with Sandy Padwe as my elective. If my heart is set here, I can select two popular courses that don’t interest me, propelling me into the course I want. Perhaps students have already been subconsciously doing this for years – there might be professors who owe their popularity to game theory! And of course, I could get stuck with my third choice.

3. I really wanted to take “Covering Religion”, but my New Media Master’s Project got in the way. The class takes a fully funded trip overseas each spring, one which overlaps with the Master’s Project deadline. Last year the class visited India, while this year they plan to go to Ireland. Pretty sweet deal, but I probably would have taken the class without the trip, alas.

4. With MIT already offering online courses, when is Columbia Journalism School going to put its money where its mouth is and offer students (and maybe more importantly, alum) the opportunity to take courses online?  Several visiting graduates expressed no small amounts of envy when shown the current New Media curricula, and past students would certainly benefit from Flash training or other New Media skills easily taught online.

Nov 212007
 

It had to happen sooner or later, but the ease of content distribution has impacted the pornography industry.

Pornographic movies are presumably easy to produce and write, so the porno industry is now being hit from both ends – battling a growing army of free content providers while simultaneously fending off the standard piracy threat so pervasive with other forms of online content.  Presumably, consumers of smut will want to pay for “quality” branding as a means of wading through unappealing amateur content.  If porn actors are like rock stars, the branding could include live appearances or, more likely, increased emphasis on endorsements for the stars.  In this case (as is the case in music labels and newspapers), it is the middle-man in the content production chain who faces the most pressure from internet market forces.

(Hat Tip: Drudge)

Oct 302007
 

Walter Hussman, Publisher of the Arkansas Democrat-Gazette and scourge of free content, appeared at a luncheon on Thursday at Columbia Journalism School to push his argument that newspapers should not be in the business of giving away free content. Hussman contended that the decline in newspaper circulation has in large part been due to the media strategy of newspapers giving away their content for free. Consumers, being rational, got their news without needing to spend additional money.

Buttressing his argument with statistics from his experience of charging for content with the Democrat-Gazette, Hussman compares the success of newspapers who charge for content versus those who do not. The numbers are compelling. Expounding on his earlier column in The Wall Street Journal, Hussman made a strong case that newspapers would fail to offset revenue lost in declining print circulation with revenue generated from online visitors. Citing the Inland Cost and Revenue Study, Hussman claimed that newspapers generate between $500 and $900 in revenue per subscriber per year, versus $5 to $10 per unique visitor per year.

These numbers tell only part of the story. Hussman then compared circulation figures for the Democrat-Gazette with the Columbus Dispatch. The Columbus Dispatch and Arkansas Democrat-Gazette are the sole mainstream dailies in their respective markets, both of which are similarly-sized state capitals. The difference between the two newspapers? The Dispatch switched to a free content model on Jan. 1, 2006. In its first six months of offering free content, the Columbus Dispatch’s daily circulation declined 5.8%, compared with a loss of 0.4% daily for the Democrat-Gazette. This comparison reflects national trends for newspapers that have decided to offer their content for free. Under Hussman’s analysis, it is difficult to see why any newspaper would offer its content for free.

However, there are real world problems with Hussman’s analysis. Most notably, Hussman’s strategy seems to require either establishing a dominant market position on local news gathering (i.e., the Democrat-Gazette in Little Rock), or serving a compelling product to a niche with disposable income (i.e., The Wall Street Journal to financiers). No less a robust content provider than The New York Times felt compelled to abandon its subscription model, hemmed in by the reality that it is neither a commanding local voice nor a provider of exquisite niche content. The evidence cited by Hussman suggests two possible strategies for newspapers going forward: first, to leverage local market power on news by charging for local content, which is difficult for larger publications with a national focus to replicate successfully. Under this model, national news offered on web sites would be posted for free, as such news is easily found elsewhere. Second, if local market power is not lucrative or too difficult to attain (such as in New York City), then obtaining a special niche or specialty would be the preferred strategy, perhaps with a component of local news. If local news is niche content that people will pay for, then large city dailies without dominant market positions might consider purchasing the smaller neighborhood newspapers, establishing neighborhood dominance to leverage for paid readership. Without establishing some kind of dominant market power, a newspaper in a multi-daily metropolis would find itself compelled to offer free online content, as any price charged would be immediately undercut by its competition. And web content does earn some money for the newspaper. Just not nearly enough.

Hussman’s arguments harken back to the early days of the dotcom boom, when the conventional wisdom was to spend money to obtain dominant online market positions. Once obtained and with hard-earned goodwill, the dotcom would finally be able to earn a return on all of the capital initially invested. The logic worked out well for some (ebay and Amazon), but failed more often than not. With control of the local Little Rock market and comparatively strong circulation, Hussman has found that it is good to be the last man standing.

Oct 252007
 

Besting Google in the process.

Critics of the leviathans Microsoft and Google might have a difficult time in determining who they should have rooted for in the battle to win a stake in Facebook: the semi-monopolistic Microsoft, so long considered the bane of smaller and more innovative companies, or Google, the dominant and innovative search engine giant that has been cited as having an “entrenched hostility to privacy” by Privacy International?

(Hat tip: Matthias).

Oct 232007
 

As if to prove my point (in a sense), the USA Today published a news article today describing how police officers in various locales are using volunteer citizens to help enforce speed limit bans.

Obviously, this kind of assistance helps enforce speed limits, and may help save lives. However, that technology is allowing for more perfect law enforcement and an enforcement rate far higher than conceivable when speed limits were passed. Such perfect enforcement distorts the original balance of enforcement rates, mortality rates, economic impacts, and convenience considered when the speed limits were passed. Perhaps maximum speed limits need to be reconsidered as a result.

More importantly, if such practices give private citizens the notion that helping police in something mundane like highway safety is their duty, then their prying into the lives of their neighbors is a modest natural progression of that mindset, eating away at our notions of privacy.

Oct 222007
 

A recent news item cited Senator Hillary Clinton for receiving sizable campaign contributions from Chinatown busboys and waiters, most of whom are presumably living on the margins and some of whom have already (proudly) said that they were merely following orders from community leaders. Donating at the behest of another person is strictly prohibited under federal campaign finance laws.

Catching Hillary and other politicians who garner money from suspect sources is a good thing. Our political offices are not for sale. But what is less clear is whether putting all of this information on the internet does not in some way infringe on other freedoms.

By analogy, the internet is in some ways like new traffic light photo technology that catches drivers who roll through empty intersections, or perfect speed traps that nab otherwise good drivers doing 75 on a long stretch of barren highway. Sure it’s still the law, but the law was passed in a time when enforcement was nowhere near 100%, a critical component for policy makers trying to ascertain the impact of speed limits on traffic patterns, safety issues, simple economics and overall convenience. Better enforcement throws the prior agreed-upon equilibrium of weighed interests out of kilter.

There is a lot of information about each of us that is public but not very accessible. In the pre-internet era, it would take a motivated person to dig up, say, my voter registration or property records. The information wasn’t private per se, but it was effectively shielded from public view due to the effort involved in digging up the public records. Newspapers could print my information and the information of my neighbors, but voter rolls and other mass quantities of data do not make for compelling reading.

The New York Times ran a fascinating piece on Subprime lending, tying in data on rates of subprime lending to community maps. The riveting maps took complex data and made it accessible and understandable to the general public. In the coming months we are going to see exquisite internet mashups showing public information laid out in maps of all types. This mapping is a prime component of the New Media Workshop course at Columbia, a cornerstone of the New Media concentration. Obviously, these maps are going to make data mining much more convenient. But therein lies a subtle problem.

There is a lot of public information that, while public, we would prefer not to have broadcast. As the mapping software gets more intricate and more data gets mined, the public will have access to maps showing all sorts of interesting data about their neighbors that they would not otherwise work to have access to. For example, the voter rolls are public information, but are not generally accessed by the public. Conceivably, local community papers could create maps showing the addresses of Democrats and Republicans on a resident-by-resident basis. That access might not be comfortable for Democrats in Crawford or Republicans on the Upper West Side, as their neighbors would suddenly know who the specks of off-color are in their community’s otherwise monochrome map. Such minority status could well be a stigma for the outed. Over time, extreme minorities might take to registering themselves as something other than their preferences, yielding less speckled, albeit more inaccurate, maps, and distorting our culture and political system. Criminal records, property tax data, voter information – all of these could conceivably be mapped, giving all members of a community a far more intimate look at their neighbors than they had previously.

Our privacy culture and laws were in part based on the premise that public information would be mined only by the most overzealous of neighbors. Now, public information on the internet makes everyone that overzealous neighbor. Public information may be crucial in checking the appetites of avaricious politicians and for informative pieces like the aforementioned Times article. But, without revisiting what should lie in the public sphere, our past and present will soon be fodder for our neighbors, the world over.

Oct 222007
 

No lawyer can resist checking out law school rankings, particularly when the rankings cast their own school in a positive light. Princeton Review has issued its own rankings of law schools, and my alma mater, Boston College, checks in at #11, ahead of piker/poseur schools like Harvard, Yale and Columbia. Har Har!

I always said that I went to the second best law school in the Boston area, but who knew that despised rival Boston University would be the best?

(Hat Tip: Instapundit)

Oct 202007
 

This topic is very close to my heart. My father left the Navy after the Korean War and started climbing poles for New York Telephone Company, working his way up from union man into middle management of New York Tel/NYNEX before retiring in the early 90s. I don’t think my father was ever prouder of me than when I secured my first real law job as junior internet attorney for Southern New England Telecom, which was purchased by SBC, a conglomeration of Regional Bell Operating Companies that became the mostly reconstituted AT&T after I left in 2000.

Ryan Singel blogs for THREAT LEVEL at Wired.com, and details Verizon and AT&T executives who have suddenly acquired an interest in helping out Senator Jay Rockefeller, a Senate Democrat from West Virginia. Sen. Rockefeller is running for reelection, and strangely enough, the scion of the still-vast Rockefeller fortune is scrapping for reelection funds. Apparently, Senator Rockefeller, sensitive to charges that he bought a Senate seat in poor West Virginia, promised his constituents that he would not dip into his family funds to help finance his political career. Now, he’s in a dogfight for reelection in a state whose constituents are far more conservative than he.

And... hey, I know someone on this list! James Ellis was General Counsel for SBC when I left the company and is now GC of AT&T, and wow, what is a Texan doing giving money to a Rockefeller? Kind of weirdly, anachronistically ironic.

Anyway, government wiretapping is a big issue these days, and could not be done without the help and complicity of the Telcos who own the Central Office space where most of the equipment used to create our cybertelephonic lives is located. With the Telcos being sued for this wiretapping, they are pulling out the lobbying machinery to make sure that they get their shield. So, a company like AT&T, with over 300,000 employees, can imply to some of its top executives that giving to Rockefeller would be a good thing.

And with the recent passage in the Senate of a bill granting telcos immunity for post-9/11 wiretapping, AT&T and their executives may have gotten their money’s worth. (to be continued)….