Exploring the impact of broadband and technology on our lives, our businesses, and our communities.
Music lovers: "We hate DRM"
A recent analysis of credit card purchases suggests that music lovers hate digital rights management (DRM), the software that tries to limit what we can do with our music and videos. The study shows that sales of digitally-protected music is dropping while online sales of CDs is increasing by comparison--meaning that we are still buying music, but prefer CDs that we can rip without limitations.
But this article, like so many others about the music industry, ignores what I think is the elephant in the room--that there is a shortage of good music to buy, and has been for years. As just one example of the completely backward thinking of the music companies, they are lobbying the online music sites like iTunes to increase the percentage of royalties paid to the music companies and decrease the amount paid to artists--even though the record company cost of distribution is essentially zero for digital downloads. That's just crazy; ultimately, if artists don't have some financial incentive to create new music, the record companies will have nothing to sell.
I have never seen an industry so determined to hate and vilify its own customers. Music sales are down, so it must be that customers are crooks--it could not possibly have anything to do with the quality of the music. Everybody I know, young and old, complains bitterly about the lack of new and interesting music, but it must be our fault for not buying the dreck that passes for popular music. It could not possibly be incompetent record companies. Music is not going away; music is something that is part of our DNA. Every culture in the world has a rich musical tradition, so despite the best (worst) efforts of the record companies to kill music, that won't happen. But one thing that could die is the current music and marketing distribution model. And that might be all for the good.
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Outsourcing: The good and the bad
BusinessWeek has an article on outsourcing that has some useful insights in it. The good: Outsourcing does not always save time or money. As many of knew when the outsourcing craze began to heat up, it is a lot of work to manage workers on the other side of the world who are 10 or 12 hours out of sync with your own office hours. In India, where IT outsourcing has helped fuel the economy, rapidly rising salaries and very high turnover (often above 50% a year) is driving U.S. businesses away. Some of that work is coming back to the United States, and there are opportunities in low cost of living rural areas to capitalize--if you have a tech-savvy workforce and affordable broadband.
The bad news is that even though some outsourcing is moving out of India, some jobs are being moved to other low wage countries. What that means for the U.S. is that IT salaries are flat, and are likely to stay flat for some time. But I have maintained that many IT jobs have been priced too high for years--an artifact of the rapid growth in IT in the nineties. Some adjustments are not necessarily bad. But overall, we are in a world economy, like it or not, and your community is competing with other countries, not just the next county or the next state. And no matter how much local leaders may not see that or deny it, it is a fact. Every community in America has to be looking over its shoulder at the world economy now. We aren't in Kansas anymore.
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Is Google killing Microsoft?
This short article talks about the Google/Microsoft war, and suggests that Google may be winning. The theory is that Microsoft is way behind Google in being able to deliver Web-enabled applications. The author points to Google's still fledgling word processing and spreadsheet applications that run via the Web.
I am not so sure. Vista is going to be a very painful upgrade, and the high cost may drive a few more people to look at the Mac and Linux as alternatives, but Microsoft makes a lot of money in the corporate and business environment, and very few serious businesses are going to try to save a few bucks by using Google's free or low fee Web apps. Are you willing to store all your company secrets and financial information on a Google server that you do not control? It is not a likely scenario. Microsoft has the deep pockets to play a long game of catch up with Google, and another flawed assumption here is that Google is doing everything right. Google has already had several flops, and it still has been unable to significantly improve its search engine, despite the long lead it has had over competitors. This will remain an interesting horse race for a long time.
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ECG/EKG for home use
A Turkish company is about to release a device designed for home use that will monitor your heart. It has a USB interface so you can plug it in your computer to store the data and/or transmit it to your doctor. Small, inexpensive devices like this are going to revolutionize health care, and within ten years, I expect most homes will have an under $500 device that will provide most of the clinical tests you now have to go to a doctor's office for. We'll see a single, integrated device with an easy to use interface that will take blood pressure, heart rate, blood oxygen, EKG, blood glucose levels, and probably several other blood tests. In home data collection of transient health problems will make it much easier to diagnose many kinds of diseases, and will cut down on trips to the doctor.
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Good news for cellphone users
In a widely reported story, a Danish study indicates a no more than normal incidence of cancer among cell phone users. Unlike many other studies, this one involved hundreds of thousands of people--a number large enough to make it statistically reliable. Researchers caution that the we still don't have enough long term data to know for sure that cellphones are completely safe. There is widespread agreement that cellphone and cordless phone frequencies in the gigahertz range do cause measurable changes in cell activity. What we don't know is whether or not this causes health problems. In the meantime, I'll continue to use a wired headset as much as possible (Bluetooth wireless headsets use microwave frequencies, so they are not an improvement).
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GPS takes ambulance 200 miles off course
I have been unimpressed with the in car navigation systems I have tried, mostly in rentals. Aside from the highly distracting nature of the devices, they are only as good as the data that they have. A case in point is the London, England ambulance crew that was supposed to transfer a patient to a hospital about twenty miles away. The crew, which was apparently new to the job, relied on the in-vehicle GPS system, which took them on a 200 mile trip because the data in the device was faulty. The crew was reprimanded and told to "learn to think for yourselves." Indeed.
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Faraday cages for test takers
A government study in Britain recommends Faraday cages for examination rooms. A Faraday cage is basically a metal-lined room that blocks all radio frequency signals. In other words, test takers won't be able to use their cellphones to text message friends for exam answers. The study also recommends scanners to detect MP3 players and other devices. It seems that some students are recording notes on their iPod and playing the content back during the exam.
I am less disturbed by the "new" uses of technology than I am about the apparent epidemic of cheating, which really has nothing to do with technology at all. Whatever happened to working hard and earning your way?
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The music companies continue the fight to own everything
MySpace is the latest battleground for Universal, one of the world's biggest music publishers. The company is upset that MySpace users can post copies of music videos on their MySpace pages. Universal wants a piece of the action. The firm has already arm-twisted YouTube into sharing ad revenue because of grainy music videos posted on the popular video site.
The content publishers have some grounds for trying to control distribution, but the music and entertainment industry has been so obstinately one-sided and spiteful in their approach (suing grandmothers without computers and young children, among other examples) that it is hard to take them seriously. The companies are now on a war footing to force equipment manufacturers to not only pay them for every digital recording device, but the firms also want draconian content controls on the machines that essentially take ownership away from the users of the music or the video.
There is a middle ground here, but the music industry and Federal lawmakers, who seem to care more about campaign contributions from the music industry than good and fair laws, are making things much worse. In the end, only the industry, with its attitude that all customers are crooks, will lose. We can get our content from other sources, and in fact, we already are.
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U.S. may be sliding downhill economically
Although I meet more economic developers these days who are beginning to understand the world is changing (a good thing), I usually find after a brief conversation with them that many of them are determined to keep doing the same old thing--they just expect different results now (one definition of insanity). Part of the problem is a belief that nothing much has really changed, but articles like this one in the Wall Street Journal suggest otherwise. The Journal reports that of the twenty-five largest IPOs (Initial Public Offerings of stock) in the world last year, only one took place in the United States. Lethargic U.S. companies and over-zealous regulation in the wake of things like the Enron scandal are leaving the U.S. behind in the global Knowledge Economy.
Local communities are competing with Hong Kong, South Korea, Singapore, and even London for business, but too many economic developers and community leaders are stubbornly determined to ignore the data. I see unlimited opportunities for communities that are willing to make some changes, but some communities, especially in rural areas, are going to slowly wither away.
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YouTube on cellphones
Would you pay $15 a month to be able to watch cheesy YouTube videos on your cellphone? Verizon is betting that you will. The company has licensed the rights to a selection of YouTube videos that Verizon subscribers will be able to download and watch on their cellphone. This represents, perhaps, the 457th attempt by a cellular company to get people to pay for content no one cares much about. ESPN recently gave up trying to get people to watch sports on cellphones, after burning through a few hundred million of someone's money.
YouTube is not exactly "must see" TV. It is generally the kind of fluff you might pull up at ten PM after you realize there is nothing on the old-fashioned television. You watch a couple of YouTube clips and go to bed. YouTube is popular, in part, because it is free. Making it cost money will be interesting because we will be able to establish its real value, and Verizon shareholders will get to foot the bill for this market research.
The flaw in all these fairly silly cellphone content ventures is the wrongheaded assumption that there is an unlimited supply of subscribers willing to pay for unnecessary stuff on top of their basic cellphone bill. At the core, it is a supply and demand issue. There may be an unlimited supply of content these days, but demand is not as elastic. Watch this venture quietly fold in about a year.
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