Digital Media Economics Reflection

I am an avid consumer of digital technologies, which makes this course very relevant as we struggle with how content should be distributed and how to monetize it. In the beginning of the quarter I presented myself with this question, “Is there an instance where something touches digital networks and doesn’t feel the effect of falling costs?” This is in response to Moore’s Law, but do I feel I’ve reached the answer? Maybe. It is obvious that as a digital immigrant I still hold onto the “atoms” of production in some sense, meaning I still feel there is a physical representation of everything, but I need to alter my thinking. Today everything touches digital networks, with maybe a few exceptions in developing worlds that haven’t been gifted technology yet. Ayush Agarwal from Madrona Venture Group said in an October lecture “we don’t till farms, we till information.” This is very true. We have evolved into a society that relies on the combined knowledge of the collective. In Clay Shirky’s Here Comes Everybody he speaks about the dissolution of specialized trades like the scribe; today we see journalists shrinking away with the advent of user generated content and citizen journalism. We even see the whole structure of marketing changing with the shift of content creation going to the common man.

Traditionally we’ve relied on advertising to learn about products, today we have user reviews on Amazon, Gizmodo and many other places that tell us what real consumers think of the products. In fact, companies like Amazon and even the Super Bowl rely on their consumer audience to produce advertisements for them. This is something that would have never happened prior to the Internet for many reasons. First, we’ve proved over and over in the MCDM that the cost of technology is so low, anyone can make a video, do some graphics, create a song, or use other’s content to create something completely new like a mashup of a Britney Spears and Gwen Stefani song. What is even more fascinating is that people enjoy creating content with limited or no monetary reward; this provides a real authentic look at consumerism, but is very challenging for companies trying to make a profit. Because of these few reasons, (but surely not just these two reasons) blogs are so popular.

When Tracy Record, the Editor of the West Seattle Blog came to talk with our class in October, she emphasized that hyperlocal journalism is just touching the edges of capability. Prior to her discussion I often didn’t think of blogs vertically, I just thought of them in categories like sports, local, pets, etc. She opened my eyes to the breadth still available for blogs. For example, she feels there is still tremendous opportunity in her immediate community for additional blogs that focus on the youth. This could be anywhere from teen issues around sex, education and after school activities, to a place where elementary children can come to engage in games, pictures and stories. They sky is the limit, and I was interested to hear Tracy’s opinion on hyperlocal journalists teaming up with the Seattle Times. I agree with her view that these should be separate, with some courteous connection for the sake of reporting honest news. It seems that larger media corporations are trying to dangle the idea of “exposure” to journalists who have already found their new niche outside a failing journalism career. Continue reading

Communication Changes Society: A Review of ‘Here Comes Everybody’

Clay Shirky’s book is fun to read. A media studies professor at NYU, his book Here’s Comes Everybody: The Power of Organizing Without Organizations, provides concrete examples of how self assembly and group organization has changed with the evolution of the Internet. Using case study examples like Flickr and Linux, the book is relevant and captivating but doesn’t shy away from providing hard facts. Simple and precisely written, readers do not need to have a PhD to understand the concepts and ideas; rather Shirky’s book is a fun read for the average media fan. I agree with his main concept that declining costs in technology allow people to self assemble in ways not imagined before; he argues this trend is changing the way we communicate and in turn the way we look at the world and society.

Group activity is like a chain of volcanoes. By this Shirky means they are all linked by one invisible central driving force, although they appear separate. He begins his book with a witty story warning people what might happen should you upset a social media lover. He then talks about the influences of community, and the rise of people as content creators in comparison to traditional media outlets. Mass amateurization allows people to publish everything, and develops niche groups of people that would not have been reached through newspapers or magazines. This, according to Shirky is the future of the Internet. He uses the second half of the book to talk about some of the implications of these groups. For example the Small Group Paradox which is an ironic concept that makes us feel the Internet is truly connecting us all. The Internet is becoming ubiquitous and he concludes by talking about how our idealized views of the future are not just an improvement from what we already have, but something completely new.

This future starts with the Internet as a new ecosystem. It did not create competition for newspapers and the journalism trade, it is something new altogether. Shirky argues there is nothing inherently connecting different newspaper stories besides the physical ink, paper, and hierarchical management. He cites the emergence of mass amateurization as the key for society being able to loosen their grip on traditional media and embrace amateur news, which is often relatively better. Different than traditional media, and the politics influencing coverage, often blogs can go beyond the first swing at a story; they can continue to cover a story with minimal or no cost. As fascinating as this dynamic is, he doesn’t mention how personal obsession drives amateur coverage, and the system of checks and balances that should in place. While mass amateurization magnifies our freedom of speech with limitless coverage on almost any topic, only those who choose to make their content stand out are the ones who receive the most recognition. Unfortunately without a system of checks and balances, it is not the good content that is popular, rather the controversial or flashy content. Continue reading

Questioning the Impact of Social Media

On Tuesday we spoke a lot about Clay Shirky, partially because most people choose to read his book Here Comes Everybody and review it. Seeing that so many people choose his book is really a compliment to how good it is. One of my favorite concepts in his book ask you to consider how changing communication changes society. Not only does this quote mean that due to new technology people will do things differently, it actually changes what we anticipate and expect as a society.

Not long ago it wasn’t rare to loose touch with high school friends and only see them at reunions. Tools like Facebook and LinkedIn bring these people back into our lives and in some cases, make us wonder if someone they haven’t talked to in 12 years really needs to know everything about their life. In a Geek’s post How Social Media Has Changed My Life the author addresses the importance social media plays in his life. Social media “has strengthened existing friendships, it has allowed me to find new friendships and gotten a taste of life in different parts of the country.” After the gravity of inclusion swallows you, I feel people realize social media is a great benefit. In class we spoke about how certain technologies are expected for digital natives…I wonder how many “when I was a kid” stories I will be telling to astonished children in 10 years.

It seems that society is moving towards a view of ‘knowing a little about everyone,’ rather than just ‘knowing a lot about a few’ close people. Families separated by thousands of miles are able to watch their grandchildren, nieces and nephews grow up using YouTube, Twitter, Flickr and many more. How will people acknowledge friends as ‘good’ or ‘acquaintance’ now that we have running threads of daily activities? Will it become expected to have a social profile and what new privacy issues will arise from it? Will there still be some people out there in 10, 20 or 30 years who refuse to have any online presence? If knowledge becomes instantaneous how will that alter what our children are expected to learn and retain? These are all questions that we will have to answer in the days, months and years to come.

Everything Wired Did Converge

Christopher Elliot’s Everything Wired Must Converge is a decade old article predicting most of what has already happened regarding networks and technology. “Convergence…will change the ways in which business is conducted.” By convergence he means the marrying of multiple business systems with the Internet. Imagine a world where your human resources, point of sale, inventory control and financial systems all spoke to each other…oh wait they do now.

A decade ago it was obvious to think that the Internet would play a big role in how we do business in the future. In Clay Shirky’s book Here Comes Everybody he talks as if the Internet is second nature and how the power of organizations help us run large businesses as well as maintain complex unmonitored systems like Wikipedia. Today the Internet is second nature, which makes reading Elliot’s account so amusing. Shirky states that “when we change the way we communicate, we change society,” (p 17). The changes Elliot predicts helped streamline communication and bring us close to the point of instantaneous communication. This change increased customer support and brought greater security and flexibility to businesses. No longer would customers would have to call the store to get shipping information, then call UPS to check when it would be delivered. Also, businesses became more condensed and transparent across departments.

The convergence Elliot speaks of is, in essence, the outcome of society evolving to make technology work for us. In doing this we are building organizations and groups of people through connections over a network. Creating a set of branded networks is something that Elliot predicts, although he predicts that we will pay for them. We see the emergence of branded networks in social applications like Facebook and Twitter. Organizations that run on complex connections show that to be social is to be human. Elliot and Shirky both agree that the possibilities of the Internet are worth investing in.

Slideshare Deck here.

We Are What We Create

The Wealth of Networks: How Social Production Transforms Markets and Freedom is a thought-provoking read. Author Yochai Benkler, Harvard professor of Entrepreneurial Legal Studies, does justice to the complexity of social production by adding dimension to a subject often simply categorized as just the Internet. His involved discussion about the networked information economy is not for the casual reader. Rather, his book is intended for deeper reflection. Change in our non-rival “information revolution” is “deep,” as Benkler opens with. The length of his book serves to prove how deep it really is. Within this book he discusses the effects of the Internet on society, which links nicely to his TED talk[1] referring to the Internet as a permanent change, not a fashionable trend.

Benkler’s complex writing style ironically mirrors how multifaceted media are and his connection to social change is fascinating. Emphasizing key concepts like networked information economy and nonmarket, his book is neatly divided into three sections: The Networked Information Economy, The Political Economy of Property and Commons, and Policies of Freedom at a Moment of Transformation. Within the first section of the book, Benkler focuses on his observations of economics and the information economy. He introduces one of the key terms he refers to continually, the networked information economy. The deepening trend he talks about is put in motion by a ripple effect of advancing technology. This trend is put to the test in the second part of his book by explaining how these changes are affecting social interactions and culture. Part three talks about polices regarding this area and touches on the layers of regulation of digital information. These layers make us to look at how regulation affects the free flow of communication and information. Continue reading

“Free” is Here to Stay

Chris Anderson’s book Free: The Future of a Radical Price, is an excellent compilation of evidence and examples persuading us to buy into the concept that Free is here to stay. But with so much technological change, we don’t need much convincing that another dramatic shift is upon us. One way Americans deal with scarcity is uncovered in the ironic determination to eradicate starvation decades ago; now today’s generation is combating obesity. This ironic relationship defines the path for his book, detailing how the future of business will make money around the notion of Free. According to Anderson this isn’t a fad, these new models like “freemium” are here to stay.

As a customer, there is a huge difference between what is free and what is cheap. Citing Dan Ariely, professor at Duke University, he highlights “zero is not just another price, it turns out, zero is an emotional hot button,” (p 63). The concept of Free is important because the majority of company’s today strive in an environment where raising demand for one thing, is gained by giving a complimentary item away for free. This is showcased in the story of Gillette razors.

The meat of Anderson’s book sits on the concept of Moore’s Law, which concludes the cost of technology is cut in half every few years and even quicker at times. With costs like this, companies are able to shift business models by focusing on making profit through programs like Google’s Adsense or thrive off the premium service subscribers from sites like Flickr or Amazon. Anderson provides a lot of evidence to back up his hypothesis with case studies from Microsoft, Craigslist and the Chinese music market, as well an easy to understand account of economics. Continue reading

Anderson, Economics & the Lightbulb

Chris Anderson is so popular right now. As I read Free! Why $0.00 Is the Future of Business again I generally get what he’s trying to sell. His concept is cool, that we have “trends driving the spread of free business models across the economy.”  We’re faced with decisions because internet and technology have become second nature, but I feel this cycle of change is just a part of an ever evolving society. In Hoskin, McFadyen and Finn’s book Media Economics, they demonstrate the predictability of markets in mathematical terms, although I wonder how emotion plays into this.

In this past Tuesday’s class, I was relieved to find that other people had trouble interpreting the Media Economics book. I was also amused by people’s need to find the key to unlock the secret to some of the concepts. Talking about diminishing marginal returns made me dizzy until Kathy used the beverage analogy: the 10th gulp of a cold drink on hot day is not as refreshing as the first. For economics I do agree with some people in the class, the light bulb has to turn on, otherwise it’s just memorizing stuff and not understanding how they relate.

Learning more about media economics, even the tough stuff, will make it easier to understand the changing landscape that Anderson points out. In fact, I think it’s very important. Being able to pick apart business models that deal with little to no profit and find a way to many money is important because it proves that our current situation is sustainable and here to stay.