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February 28, 2005
The backwards music business
According to a story in today's Financial Times, music companies are upset because, get this, customers are flocking to buy legal digital downloads.
For several years, the record companies have complained about unauthorized peer-to-peer file sharing. Now, they are finally generating significant revenues from users paying to receive their songs over the Net. And the labels' response is to complain that prices must be set too low. There were other, higher-priced digital download services around before Apple made 99 cents the standard price on iTunes, and they failed to catch on. That seems to suggest the current prices are in the sweet spot of the market, stimulating demand and luring users away from P2P downloads. The record companies seem to think otherwise.
In most businesses, news that customers are buying your products in droves would be met with jubilation. But in an industry used to controlling distribution chains and prices through rigid oligopolistic practices, that scenario is met with fear. Of course, if prices for legal digital downloads go up, illegal digital downloads start to look more attractive again. The labels may be about to cut off their noses to spite their faces.
Posted by Kevin Werbach at 11:23 AM | Comments (1) | TrackBack
February 27, 2005
Guess Who's Coming to Supernova, Part I
This year's Supernova is really starting to come together. Registration is now open, so sign up, y'all!
As usual, we've got some wonderful people speaking. Here's an introduction to a few of them; I'll post updates periodically in the future. The speakers page on our Website has a longer list of confirmed participants.
- Hossein Eslambolchi is the chief technology officer of AT&T. In fact, his full title is CIO and CTO of AT&T, plus president of AT&T Global Networking Technology Services. And if that's not enough, he holds over 100 patents. Hossein is one of the key architects of the network of the future. Yes, AT&T has gone through tough times of late, and it has agreed to be acquired by SBC, but it remains one of the world's premier communications service providers, with technology and experience second to none. Don't you want to hear what Hossein has to say about convergence and the future of the Net?
- I met Mena Trott at the first Supernova conference, where she helped put together the conference Weblog. I noticed that my power-blogger friends were switching in droves to the tool that Mena and her husband Ben developed, Movable Type. At that first Supernova, Mean and Ben sat on the floor in the back of the room at times, but they also made contact with Joi Ito (who would become their lead investor) and Barak Berkowitz (who would become their CEO). Today, Mena's company, Six Apart, is at the crest of the bloging wave. Mena always has a great perspective on both the new tools that are changing business, social interactions, and media... as well as on those who use them.
- Chris Anderson is the editor in chief of Wired. He's done something pretty remarkable in remaking what many wrote off as a vestige of the dotcom era into a publication that is once again vital and an opinion-shaper. His recent essay, The Long Tail, isn't just journalism; it's a deeply perceptive analysis of the future of commerce, media, and, well, just about everything. And, not surprisingly, it ties in perfectly with Supernova's themes.
And, of course, that richness isn't limited to those who happen to be speaking this year. The best part of Supernova is the attendees. Most of them could be (and often are) on stage. I hope you'll join us.
Posted by Kevin Werbach at 3:21 PM | TrackBack
February 25, 2005
Today's fun stats
Some fun facts from the two keynotes I attended at the Wharton Technology Conference today: Lou D'Ambrosio of Avaya and Jeff Weiner of Yahoo!
- In 1998, the average Web search query was 1.2 words long; in 2004 was twice as long (2.5 words). Weiner (who heads up the search business at Yahoo!) made an insightful connection between this stat and the Long Tail phenomenon. Longer queries means more permutations. More permutations means more unique searches. More unique searches means a longer tail in the distirbution of queries, which enables business models (sponsored search and micro-targeted advertising) that focus on that side of the curve.
- Yahoo!'s Launch service has three billion recommendations about music from its users. I wonder how many recommendations Amazon.com has on its site? Must be a biiiiiiig number
- There were 17 million business voice over IP lines deoployed in 2004. In 2005, that is expected to be 24.6 million, which for the first time will exceed new TDM (traditional telephone) lines deployed. In other words, this year is the inflection point for VOIP in business.
Posted by Kevin Werbach at 3:37 PM | Comments (0) | TrackBack
February 24, 2005
Fun with information visualization
Who would have thought a historical baby-name database could be so compelling?
Posted by Kevin Werbach at 9:44 PM | Comments (0) | TrackBack
February 23, 2005
Length isn't Everything
The Harvard Law Review (where I served as an editor some ten years ago) is leading an effort to prune back the excessive length of law review articles. Eleven of the top journals have 110-page article in a law review last year. The dirty secret is that, in legal academia, longer articles are often treated as a proxy for "serious scholarship," when it's necessarily true that the biggest pieces are the best. I wouldn't have had much trouble condensing my piece to 70 pages, or 50, if that had been the standard. The rest of the material might have wound up in another article, which is fine.
There aren't many points that can't be made in 35,000 words. Even for law professors.
Posted by Kevin Werbach at 10:55 AM | Comments (0) | TrackBack
Photos and Social Networks
Very cool visualizations of relationships among photo-sharing users at FlickrLand.
Posted by Kevin Werbach at 10:21 AM | TrackBack
Billions and Billions served
14.2 billion video streams sent over the Net in 2004, a 79% increase over 2003, according to AccuStream iMedia. (via IT Facts)
That doesn't include the vast amount of P2P video downloads through BitTorrent and similar services. The videonet is coming faster than we think.
Posted by Kevin Werbach at 9:59 AM | Comments (1) | TrackBack
February 20, 2005
Why the Broadcast Flag Matters
Susan Crawford explains why this week's oral argument concerning the FCC's broadcast flag ruling is important to the future of the Net.
Posted by Kevin Werbach at 1:57 PM | Comments (0) | TrackBack
February 17, 2005
Philly WiFi: The Gloves Come Off
It has been interesting to watch the debate progress over the city of Philadelphia's plan to create a city-wide outdoor public WiFi network. The project generated a lot of attention when first announced. At that time, Verizon and Comcast didn't have much to say about it. Then word leaked out that a bill in the Pennsylvania legislature would prohibit Philadelphia and other cities from engaging in such projects. (After a firestorm of protest, Philadelphia got an exception.)
Now that the city has moved along with its plans, the incumbent phone and cable companies are hardening their opposition. They are talking as though the governing is nationalizing broadband access. Nothing could be further from the truth. The city of Philadelphia is doing what cities do -- look for ways to provide valuable services to its citizens, when the market doesn't meet the entire need. It isn't killing off private competitors. City-run public housing competes with private real estate, and city buses compete with private cabs, but no one seems to have a problem with that.
What gets lost in this debate is that the city and its citizens will benefit in many other ways from a ubiquitous public WiFi network. The city spends millions of dollars on wireless networks for police, fire department, and other city departments. This will decrease costs and greatly increase capabilities for those service. For example, think of how city building inspectors could use the network to access plans and send filings back in real-time. And that's just the start.
Let's not allow reflexive opposition to "bureaucracies" to kill a worthwhile program. Sometimes governments do good things too.
Posted by Kevin Werbach at 1:17 PM | Comments (0) | TrackBack
Why We Need Network Neutrality
Vonage, the leading independent US VOIP provider, has complained to the FCC that a broadband access provider is blocking the ports it uses to provide service.
I and others have been raising concerns for some time that broadband platform owners will use their control of the physical and logical layers of the network to preclude innovation and competition at higher layers. We've been told this is a fantasy, and that no broadband provider would have an incentive to do so. Maybe we were right.
Posted by Kevin Werbach at 11:08 AM | Comments (2) | TrackBack
February 16, 2005
Wharton Tech Conference
I'll be moderating the digital media panel at the Wharton Technology Conference next Friday, at the Philadelphia Convention Center. The panelists include Tina Sharkey of AOL, Alberto Moriondo of Motorola, Bernard Gershon of ABC News, Raj Amin of N2 Broadband, and Alan Citron of Movielink. Should be a great discussion, and a great conference. If you are in Philly or the environs, check it out.
Posted by Kevin Werbach at 4:33 PM | TrackBack
February 14, 2005
Those Poor Phone Companies
Qwest CEO Richard Notebaert, speaking at the Silicon Flatirons conference, used a great quote from former LA Dodgers managerTommy Lasorda: "I've stopped telling people about my problems. 80% of people listening don't care, and the other 20% are glad I'm having problems."
Notebaert's words are ironic, because his predecessor, Joe Nacchio, got into hot water by whining about his company's problems. In an incident that has become infamous, Dan Gillmor blogged in real-time about Nacchio's comments at PC Forum, turning the audience against hostile when people discovered Nacchio was pocketing enormous profits from selling Qwest stock.
Of course, like any good politician, Notebaert followed the Tommy Lasorda quote with a litany of complaints about how phone companies are regulated more than their competitors in the cable industry. Some things never change.
He had one good anecdote about the rate of wireless substitution for wired phone service. Qwest used to have to cancel vacations and schedule additional staff time in Boulder, CO, in early September, in order to handle the influx of University of Colorado students who needed phone service. Today, a huge percentage of those students just use mobile phones for their phone service. Qwest no longer sees a spike in demand when the students come back.
Posted by Kevin Werbach at 11:26 AM | Comments (0) | TrackBack
The Other Shoe Drops
Verizon announced today that it is buying MCI. Not a surprise to anyone, especially after the AT&T/SBC announcement two weeks ago. Another domino falls, and another telecom competitor goes off the boards.
One worry about these two deals is they give incumbent local phone companies control over a huge chunk of the Internet backbone. MCI controls the former UUNet network, and has been among the top providers of core Internet infrastructure from the early days of the commercial Net. If the pending mergers go through, Sprint and Level 3 become the only major independent backbones, and both are in somewhat shaky positions in their own right.
We take it for granted that Internet peering and transport in the US aren't subject to the competitive and regulatory gamesmanship we've seen in the telephone world. That may not be true in the future.
Posted by Kevin Werbach at 7:50 AM | Comments (0) | TrackBack
Meeting of the Deregulators
Here is FCC Chairman Michael Powell chatting with Alfred Kahn, the father of deregulation.
Kahn is a legendary economist who oversaw the deregulation of the airline industry, and influenced a generation of policy-makers. At 87, he's as lively as ever.
Kahn and Powell are both speakers at the Silicon Flatirons conference here in Boulder, Colorado, where I'm also speaking. In the middle is my friend Phil Weiser, a professor at the University of Colorado law school and organizer of the conference. Phil has done a wonderful job pulling together leading thinkers and policy people.
We had some great discussions today. Larry Lessig and Vint Cerf started us off with a bang. And my panel was a spirited discussion of the layered model and other issues around reform of the Telecommunications Act.
Posted by Kevin Werbach at 1:33 AM | TrackBack
The New FCC?
The rumor out of Washington is that the new FCC Chairman will be current commissioner Kevin Martin. Martin is perhaps best known for breaking with Michael Powell on preserving low unbundling rates for local competitors, a decision later overturned by the courts. In reality, he sided with Powell on most issues, although in style and personality, he's a different person. Kevin graduated the year before me from Harvard Law School.
Supposedly, the other two open seats on the Commission will be filled by Becky Klein, former chair of the Texas Public Utility Commission, and Earl Comstock, former aid to Senator Ted Stevens of Alaska.
I don't have any confirmation for this, but it seems like a very believable possibility. My understanding is that the anouncement could come as early as Monday.
Posted by Kevin Werbach at 1:03 AM | Comments (0) | TrackBack
February 12, 2005
FL to CO
I'm at the airport in Gainesville, Florida, which is so small that they don't even open the security screening line until a plane comes in. And, lo and behold, they have free WiFi access. Better yet, they have something I've never seen in an airport -- free Ethernet jacks in the wall!
I'm in between two academic conferences, one at the University of Florida and one at the University of Colorado. Apparently, the weather is about the same in both places, and roughly the same in Philadelphia, where I came from. Global warming, or what?
I'm looking forward to the Colorado event. Larry "Christopher Lloyd" Lessig is supposed to be there along with Michael "Michael Powell" Powell, and various other friends and former colleagues. Should be a great discussion on telecom policy.
Posted by Kevin Werbach at 6:17 PM | TrackBack
February 10, 2005
Bye Bye Carly
Knowledge@Wharton is running a dual interview with me and fellow Wharton professor Michael Useem discussing Carly Fiorina's ouster at HP.
A snippet of my comments:
We need to step back and look at the reasons why HP and Fiorina sought to do something as radical as the merger with Compaq. There was a widespread feeling at that time that although HP had a very strong reputation, it was out of step with the industry. PCs and IT in general were becoming very difficult businesses, and companies like Dell were pushing margins down. HP's merger with Compaq was supposed to solve that problem. It was controversial, but Fiorina sold it as something that would help HP get out of the doldrums. It hasn't done that. Critics of the merger have said that the merger was like tying two stones together and believing they would float. The merger didn't solve HP's problems; it just added Compaq's problems to its own.
Posted by Kevin Werbach at 5:07 AM | Comments (0) | TrackBack
February 7, 2005
Season's End
Well, the Eagles lost. Made it close, but fell short in the end against a great team. The worst feeling is the knowledge that now there's no football for six months. We may make it back to the Superbowl, but us fans will have to wait at least a year to see it.
Wow, I guess I'll have to post about technology and stuff like that for a while. Bear with me.
Posted by Kevin Werbach at 7:40 AM | TrackBack
February 6, 2005
Superbowl Sunday
We just have two words to say:
GO EAGLES!
Posted by Kevin Werbach at 3:20 PM | Comments (0) | TrackBack
February 4, 2005
Supernova 2005 Website
We've just launched the new Website for Supernova 2005. Go check it out! Registration, speaking info, and more details are coming soon.
I'm really excited about bringing together deep technology insights and amazing people with Wharton's high-level business visibility. I hope you can join us in San Francisco, June 20-22.
Posted by Kevin Werbach at 3:18 PM | Comments (0) | TrackBack
February 2, 2005
Who will buy Tivo for scrap?
OK, I have to admit it. Tivo's goose is cooked. I've been a Tivo user for years, and like most Tivo owners, I absolutely love the product. I've been convinced since I first plugged it in that some day, all TV would work like this. And I'm still convinced of that. Television as a fixed schedule grid determined by networks and cable operators is doomed. User control is the future of TV.
Unfortunately, Tivo the company hasn't done as well as Tivo the idea, or Tivo the product design. The latest bad news is that Marty Yudkovitz, the ABC veteran brought in as President, is resigning. This after Mike Ramsay announced he would step down as CEO. Maybe someone else will come in and pull off a miraculous turnaround, but it seems unlikely. Cable operators and companies like Microsoft are launching their own digital recorders (DVRs), limiting Tivo's growth prospects.
Tivo, though, still has two big assets. I'm reasonably confident those assets will be valuable enough for one of the major industry players to purchase, or perhaps a consortium. The assets are Tivo's brand, and its patents.
Like Google, Tivo has reached "verb" status as a technology brand. People talk about "Tivoing" programs, because they associate the name with the whole concept of DVRs. That's worth a lot, even to a company that plans to scrap Tivo's actual technology. Just ask the good folks at Roxio, er, Napster.
Perhaps even more significant, though, is Tivo's intellectual property. I don't know exactly what patents Tivo holds, but it has a significant portfolio of assets, because it has been in the game so long and innovated in so many areas. Big interests that want to compete in the video space -- and that, today, means some very big interests -- won't want to be on the other side of those patents. We saw a similar story recently with Intertrust, which held key digital rights management patents that led to an acquisition by Sony and Philips.
Posted by Kevin Werbach at 10:10 AM | Comments (0) | TrackBack