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A Nemo blog. Dealing with uncommon cents.

NYT Geek Team. Pic New Yorker Mag – Mike McGregor

For the newspapers it all comes down to a simple equation – online advertising is not covering the losses of print advertising as circulation drops. This is eerily reminiscent of the recording industry’s woes where digital sales are nowhere near covering the slump of CD sales. [NB: The LA Times says that online ad revenue covers the cost of its online and print editorial teams.]

Let’s not be hasty though. At The New York Times which has been taking a battering lately – its stock is down 60% and it announced plans to mortgage its buildings to raise cash – there is hope, something is stirring. As an article by Emily Nussbaum in New York Magazine points out -

“…. even as the financial pages wrote the paper’s obit, deep within that fancy Renzo Piano palace across from the Port Authority, something hopeful has been going on: a kind of evolution. Each day, peculiar wings and gills poke up on the Times’ website—video, audio, “drillable” graphics. Beneath Nicholas Kristof’s op-ed column, there’s a link to his blog, Twitter feed, Facebook page, and YouTube videos. Coverage of Gaza features a time line linking to earlier reporting, video coverage, and an encyclopedic entry on Hamas. Throughout the election, glittering interactive maps let readers plumb voting results. There were 360-degree panoramas of the Democratic convention; audio “back story” with reporters like Adam Nagourney; searchable video of the debates. It was a radical reinvention of the Times voice, shattering the omniscient God-tones in which the paper had always grounded its coverage; the new features tugged the reader closer through comments and interactivity, rendering the relationship between reporter and audience more intimate, immediate, exposed.”

As an example of how to raise revenue online, David Carr in the NYT argues that there’s a need for an iTunes For News where readers can pay for the news content they want. In response Jack Shafer at Slate says -

“Actually, a flawed iTunes for news already exists: It delivers content through Amazon’s Kindle. The Kindle can download paid subscriptions to the New York Times, the Wall Street Journal, the Washington Post, the Financial Times, USA Today, the Los Angeles Times, and 12 other dailies via built-in EVDO reception. Newspaper subscriptions run between $5.99 and $13.99 a month.”

He goes on to say that publishers have been promising customers lightweight tablet readers for decades but didn’t deliver so he now suggests that the newspaper owners should jump quickly and produce a Kindle-like device so they can control their own content. Remind you of the music industry anybody?

In the meantime the winds of change seem to be thrashing print media:

Chicago Tribune Goes Tabloid for Single Copy Editions

Web startup to offer foreign news as newspapers cut foreign desks

And magazine’s aren’t immune to the new, new thing either – Really, what is wrong with Vogue?

Pic from HuffingtonPost.com

I have been an enthusiastic user of Amazon’s MP3 Store ever since it launched. The store challenges the hegemony of the Apple iTunes Store which is the front runner because of savvy marketing and the superior hardware that is the iPod, but there is no reason that music lovers shouldn’t be able to gather up music from other sources whilst reaping the benefits of DRM-free MP3s; people need to be educated about Digital Rights Management or DRM and obviously it isn’t in Apple’s interest to do that. *See footnotes for explanation about DRM.

Here’s the rub – MP3s purchased from Apple’s iTunes store can only be played on an iPod or a computer authorized by the user to play those MP3s, they can not be transferred to other devices. *See footnotes on how to work around Apple’s DRM. Locking down the music to Apple devices is the technological equivalent of the buggy whip manufacturers back in the day, getting laws passed to ensure that anyone driving a Model T Ford had to have someone walk in front of the car to warn pedestrians of its approach….

Steve Jobs has long maintained that the decision to go with DRM in the first place was because the major record labels demanded that their music files be protected. Critics have long pointed out that it is in Apple’s interest to use DRM to lock the music to the iPod as all of Apple’s profits are in the hardware not the content. And now that Amazon has opened its MP3 download store offering major label music at twice the file size, 256kbs to Apple’s 128kbs, and at prices cheaper than iTunes, Jobs’ argument is beginning to wear thin. *See footnotes for an explanation of MP3 file sizes.

And now comes the G1 Android-based phone, every one of which includes Amazon.com’s DRM-free MP3 store pre-loaded. The G1 users may have never understood the benefits of DRM-free songs and they may never have heard of Amazon’s MP3 store, yet it is not a stretch to imagine that once they use the Amazon service on the phone and realize they can move their music downloads freely and easily across all MP3-playing devices it will make them look askance at the iTunes store.

The Amazon MP3 Store works seamlessly with the iTunes application too so there’s no worry of having to use another application to play MP3s. Upon download of MP3s from Amazon its downloader populates the songs into your iTunes folder, it’s that simple. After that if you own a Zune or an iRiver you can simply sync the device up and the MP3s will appear just as they do on an iPod – you no longer need an iPod to play MP3s unless you have purchased MP3s from iTunes with DRM… Once public awareness spreads of the benefits of DRM-Free files, [no doubt by word of mouth as it is not a media-driven story,] iTunes may have to think again about using DRM.

* About DRM

DRM is short for Digital Rights Management. From Wikipedia – Digital rights management (DRM) is a generic term that refers to access control technologies used by hardware manufacturers, publishers and copyright holders to limit usage of digital media or devices. The term is used to describe any technology which makes the unauthorized use of media or devices technically formidable, and generally doesn’t include other forms of copy protection which can be circumvented without modifying the media or device, such as serial numbers or keyfiles. It can also refer to restrictions associated with specific instances of digital works or devices. Digital rights management has been and is being used by content provider companies such as Sony, Apple Inc., Microsoft and the BBC.

* How to remove the DRM from an iTunes purchased MP3:

Simply create a new playlist in your iTunes application. Drag the purchased album or any individual purchased tracks to the playlist. Click ‘Burn CD’ and insert a blank CD-R. After burning the CD click ‘Import CD’ after ensuring that you have set the preferences for importing to ‘MP3.’ The newly imported songs from the CD are now all DRM-Free MP3s. After successfully importing from the CD you can either delete the original MP3s with DRM or keep them for back up.

* An explanation of MP3 file sizes.

In the iTunes applications preferences click on ‘General’ then ‘Import Settings.’ Select ‘MP3 Encoder’ then click on ‘Setting’ below. You now have a choice of file size settings. Apple tags the settings Good Quality – 128kbs, High Quality – 160 kbs and Higher Quality – 192 kbs where the number of kbs refers to the kilobit size of the MP3 file. The higher the number the better quality of the MP3 file for playback. You can also select a custom setting to go higher still. Some people argue that 320kbs is near-CD quality for instance. Apple’s iTunes Store offers downloads at 128kbs while Amazon’s MP3 Store offers files at 256kbs, twice the size in other words.

I’ve been a proponent of the Long Tail theory since stumbling upon Chris Anderson’s blog of the same name. Reading the book affirmed some thoughts I’d had about how certain niche products found a life online that they most certainly would not have found in a regular bricks and mortar retail outlet.

Granted, because of my background in online music distribution the theory immediately appealed to me. I saw it as an idea that would help unlock the gatekeepers stranglehold over the discovery of music either as CDs or legal music files. Those gatekeepers being terrestrial radio, the record companies and online music retailers such as iTunes who wrapped their music files with DRM.

A simple explanation of the Long Tail theory is that the internet gives us unparalleled access to more products across the “tail” and doesn’t just expose us to those mass products at the “head.” It suggests that people are willing to search and pull a song from say, Tortoise, an alternative music outfit that sells modestly, rather than sit back and be bombarded by iTunes trying to sell them, or push, a song from Coldplay. As the theory goes, Tortoise could make a living selling its music vertically in its slice of the tail.

Like any good theory it is open to question and discussion. This is where Anita Elberse steps in with her article in the Harvard Business Review entitled ‘Should You Invest in The Long Tail?’ Meanwhile Chris Anderson has been gracious enough to accept the challenge to his theory by responding to it on his blog.

I need to spend time with the article as it is not only lengthy but includes a lot of data and links to sources, as well as concluding with advice to different businesses on how or not to include the Long Tail in their marketing efforts. Anderson’s responses will take some digestion too. Perspective and insight is required before comment. That’s why it’s frustrating to me that people like Lee Gomes of the Wall Street Journal’s Portals column has jumped in gleefully accusing Wired magazine [where Chris Anderson is Editor-In-Chief] of having a “template” where they “take a partly true, modestly interesting, tech-friendly idea and puff it up to Second Coming proportions.”

Gomes is of course allowed his opinion of Wired magazine articles but I wonder if he has really had time to read and digest Elberse’s paper as well as study Anderson’s responses. It’s also odd that he blames bloggers for “talking up the theory, which is no wonder considering how it held out the promise that even the most obscure among them could win a robust audience.” As a columnist for the WSJ he has been happily debunking the Long Tail theory since it inception as he did in this article from July 2006. Is he more fearful of the Long Tail theory or of the bloggers who may gain audience share along the tail away from the WSJ head?

Whatever the outcome of the debate between Elberse and Anderson I doubt that there will be immediate agreement on the benefits or not of the Long Tail. One things for sure, it is way too soon to be joyfully jumping upon its supposed grave.

Slowly but surely Apple’s iTunes and its accompanying device, Apple TV, are narrowing the gap for me when it comes to TV viewing choices. My cable package with Comcast frustrates me – it’s like the mobile phone provider packages too, you get all locked up with stuff you don’t need, to get access to the stuff you do need. It’s just like walled gardens with the social networks and music services online, it’s a model that has to be broken. And Comcast and other ISP’s need to understand that the end user, their customers, treat Internet access as a utility like electricity so it’s about time that the “one price fits all” model is dismantled too.

With iTunes and Apple TV I can pick and choose the shows I want to watch and I can time-shift, i.e., watch them when I want. If I want to watch all the Deadwood episodes in one weekend marathon I can. And I will own them too and have the ability to watch them anywhere – iPhone, MacBook, iPod.