Fame is worth more than Fortune

Just ask Google who they can make more money off! David Beckham or Warren Buffet.
Granted, Beckham isn't exactly poor, but that's the point really.
'Pure-play advertising', for want of a better term, where the advertisement is force-fed to the customer through barely concealed restraints, is just not going to cut it any more. Advertisers need to be much more subtle nowadays, but more than that, they need Fame in any form, in order to sell their products.
Clay Shirky wrote a piece about Fame vs Fortune where he talks about how micropayments don't work. Well, I agree to some extent, but I think the logic is; if you're not famous, people aren't going to pay money for your content, and if you charge money for your content then you're not going to be famous (without substantial upfront investment in making you appear famous before you actually are).
The latter model is the one used by the Record Companies and it's an outdated model that they are trying to cling on to, in order to preserve their way of life.

Startling news (sic) was released recently that Digital Recorders actually raise viewership . In other words, increasing accessibility to content improves its distribution and increases its audience.

The value of having a large audience is becoming very clear in the market and fame is the personification of large audience figures. While fame generally applies to an individual or group, branding applies to a concept or theme. Is Harry Potter famous or a brand? In the end it doesn't really matter, the audience is enormous, the merchanising is astronomical, because it is a community. A community of people who experienced the material, liked it and want more. Why else would someone buy a Harry Potter towel, it doesn't dry you magically, it's just a towel. What it does is increase your sense of belonging to the community/club.

Free content creates Fame/Brand. Fame and Brands create Communities, and communities generate revenue.

As Clay says, the shift in publishing power is epochal and accelerating. Where people are prepared to offer content for free, the market for paid material is going to be very tough for all but the very famous. The chance of achieving this level of fame and the fortune that will undoubtedly go with it, is likely to keep the trend for free content accelerating.
Nobody wants to introduce mental transaction costs into an equation they hope is going to make them famous.

The Energy Long Tail...

A mega-value Triple Diamond club reader (as James Enck would say), said I should post something on the looming energy crisis and its effect on communications and the economy in general.
'Energy crisis? What energy crisis?' I said, switching on my second Linux server and turning the air-conditioning up a notch.
It turns out we are riding on the crest of a wave and land just came into view. There's no getting around it either. Some time this decade Oil and Gas production will peak and then we will be be on a downward curve until oil runs out, sometime around the latter half of the century.


Of course the estimates of new discoveries could be wrong, or consumption estimates could be wrong, but there's enough consensus to make it within the bounds of normal hypothesis. i.e. they won't be that far wrong.

So what does it mean for the communications industry?
Well, one of the things you think about is, how much does it cost you to leave your router on 24 hours? Your PC? The masts that constitute the UK phone network, 50,000 of them by 2007?
Communications needs power, lots of it, and right now, a lot of that power comes from oil and gas.

We can always use alternative energies? Well, yes (we're going to have to), but they're going to cost you? At the moment they could not keep pace with the rising energy consumption demands of India and China! It is going to be down to combining increased use of marginalised technologies such as wave, solar and wind power and radically altering the consumption patterns that have developed in the oil era. Rediscovery of ideas which were uneconomical at the time they were thought of - the Long Tail of Energy production.
Perhaps this is just an example of Newtons 3rd law; as the price of voice communication comes down, the price of energy to facilitate it goes up. In the end the amount we spend may well stay the same, or at least not decrease as much as people might expect. The money will just flow from the telco to the energy utility.
Transport is the second piece of this equation, and that's where it gets a bit more interesting. Cars? Well, I expect hybrid and full electric cars are on the very near horizon, especially if advances in battery technology pan out. Air travel is a different matter, I don't see electric planes in the near future, so how will we travel quickly across continents, as has been our growing trend over the last 20 years??
Paradoxically, communications will make the world smaller, yet our consumption will make it bigger again. Being there, virtually, may replace actually being there (like we used to predict in the eighties! ;)

There are various efforts already underway to mitigate some of these effects. A recent NASA prize was offered for laser-powered flight.
xG Technology has developed a communications approach that can transmit/receive broadband data over long distances with minimal power consumption.

Mesh networks can operate with no, or minimal central infrastructure.

Overall, I would expect that we start to see some disruptive activity in the energy space as well, over the next 20 years (hopefully not politically disruptive!), and the decreasing importance of national regulatory solutions to the problem, over local ones.

P2P Energy exchanges anyone? I have 200GW of online storage on GooglePower....

5 reasons why firms should ban mobiles...

Voip-news Australia quotes a report released by Info-tech which lists 5 Reasons to ban Skype.
So, if you're an IT manager with a Napoleon complex, here's 5 reasons why you should ban mobile phones (listed alongside the reasons to ban Skype in grey)

1. It’s too firewall-friendly. Skype's proprietary closed-source VoIP protocol - which does not employ accepted VoIP standards like H.323 and Session Initiation Protocol (SIP) - allows it to traverse corporate firewalls and symmetric NATs. An unknown and unsanctioned VoIP protocol freely roaming the network - without IT's approval or assessment - poses an unacceptable transgression of IT's authority over the corporate network and computing resources.

1. It's outside IT control - with current 3G phones, any amount of data and voice can be occurring entirely outside the corporate network, but linked to it through laptops or desktop syncs or flash memory cards. The software for this is not standardised and varies by manufacturer. Unknown and unsanctioned software!

2. It has too many vulnerabilities. Buffer overflow vulnerabilities are known to exist in Skype. And since Skype travels the network as data packets, conversations are prone to capture. Problems also exist with Skype's encryption format: First, it doesn’t prevent a man in the middle attack and secondly, if it becomes infected with a worm (which it one day will), the worm could hide in the encryption during transmission, undetected by anti-virus software. Because the encryption is closed source, there are some unanswered questions about how well the keys are managed. Finally, Skype recently announced that all of its VoIP clients – including Windows, Linux, Mac OS X, and Pocket PC – suffer from bugs that leave PCs prone to crashes and open computers to takeover by a hacker.

2. The GSM encryption has too many vulnerabilities. Software with phones such as Windows CE is prone to buffer overflows
..blah, blah (I could quote from security reports too!)

3. It poses a communication barrier with other countries or institutions. Countries like China and Oman have banned Skype already [China and Oman banned unregulated VoIP!], as has the rest of the United Arab Emirates. Many post-secondary institutions in North America have banned Skype as well, in addition to most other P2P and file sharing applications.

3. The cost to the firm of mobile calls is likely to be one of the biggest expenses, but what value are they getting! Look at your roaming costs, they could be described as a communications barrier. But let's all do what a minority of post-secondary North American institutions do, because our users are just like a bunch of students.

4. It violates established legal requirements. For example, securities brokers operate under a mandatory requirement to record and track all telephone calls. Unsanctioned usage of an application like Skype would put a brokerage at severe risk of prosecution if caught using telephony that is undetectable, untraceable, and unauditable.

4. Eh, ditto?! [use a 3rd party recording device!]

5. It's one more type of communication to secure, monitor, store, and archive. Enterprises are already struggling with records retention rules imposed by HIPAA, Sarbanes-Oxley, and other laws. In addition, the question of whether VoIP calls constitute a business record or not is a legal quagmire in and of itself. Throwing Skype into the communications mix will only further cloud the issue.

5. Nope, I can't think of any other reason either...

They probably started the piece as 'Top 10 reasons...' but gave up after 5.
By the way, if anyone is taking me literally, I don't advocate the banning of mobile phones OR Skype.
The more observant will have noticed that most of the links were to Australian sites, so Info-tech didn't even look on their own doorstep, or maybe they think that phones are not subject to the same scrutiny as Skype (or VoIP). Or maybe they don't want to offend the hand that feeds them?!

New Company? Oh, we see... (VC)

I liked the idea of Kevin Burton to get funding for his new TailRank company. Sounds quite an interesting concept and he is soliciting 'donations' from people to help him get it off the ground.
It got me thinking, why can't the community VC a new company or concept? This is not really what Kevin is trying to do, he wants to keep all the shares for himself but give away subscriptions to the service, kind of like giving kids sweets for delivering a package across town!
Clearly there are a lot of issues around governance and equity laws, but we love to bet, and what better to bet on than ideas and concepts.

A company could place itself up for VC investment. It puts, say, 50% of its shares in the pot and people then place a bid on the shares. Over time, successful VCs will get a reputation that will inspire others to invest in things they put money in. Kind of VCbay?!
Once all the shares are covered by bids, the company can close out the funding round, if not covered it can still close on reconfirmation from investors. i.e. you only commit to funding if everyone bidding AFTER you bids the same or higher AND all shares on offer are covered. Bidding for more than 5% entitles you to sign an NDA and see the interesting stuff, but bids of more than 5% can be rejected by the owners.
Not for raising multiple millions, at least not initially, but good for the $20-$100k bracket. I'm also aware of the concepts of escrow and sales moratoriums.

Could be an idea? Now, where would I get funding? ;)

Pimp my Pipe!

This blog, and just about every other, except the die-hard telco ones, expounds the value of the stupid network. In other words, what travels across the network is nothing more than zeros and ones.
There are those that say that this approach would make it prohibitively expensive to get connected, although the evidence is much to the contrary (for example the proposed Amsterdam FTTH project).
But the thing that scares the telcos is that they see no way to add value to their service, except in reliability and speed. This is because they are looking at the situation backwards.
They see the end users as their customers and the companies dealing with those users as their potential partners, when in fact they should be seeing the end users as their partners and the companies dealing with them as their customers.

To illustrate this principal, let's take Martin Varsavsky's Fon venture. This is a system that links a whole lot of personal WiFi hotspots together into a single accessible network. If you share your WiFi connection, then you will be granted access to everyone elses WiFi network. It is a partnership, where the greater the number of people who sign up, the more useful it will become. Both to the users and the customers!

How is it going to make money? Well, I don't know what Martin's ideas are, beyond the ability to sell access to the network to people from outside.
This is not where the money is, though!
I mean, if I wanted access, I could just sign up for Fon at home and share my own Wifi access, that would give me free use of the rest of the Fon net.
Fon won't get any money from that, not a bean, but it has a side effect; the network just increased in size (and incidentally, someone just bought a router specifically to use with Fon).

Are you beginning to get the picture?
There's more...

All these people who now have access to Fon are busy downloading and communicating over the Fon network (the internet), but who knows where they are and how long they've been there? Fon does! (maybe more stuff too depending on how the software in the router works).
They authenticate and can easily maintain presence. They could also encrypt and route all Fon traffic back to the Fon backbone. This is almost Googlesque in simple genius (though Google claim serendipity).
With presence, routing and authentication, Fon would be able to deliver any service; voice, music download, photo/video, gaming, filesharing and all the other good stuff.
Foneros could choose to use MS Live/Google or Yahoo instead of Fon, but they still have to make themselves known to Fon, because they have to be authenticated. That makes it sticky.
Google makes billions on this stuff, and yet Fon could be built for virtually nothing, because it is a partnership with the users.

The key is to get a critical mass. It will not be as simple to get that as it was for Skype, the Fon network has to be useful, and the key to making it useful is to make it widely available. Going into partnership with a hotspot operator would be
the easiest way to do that, which I expect is why talks are being held with Swisscom.

Let's just recap on what Fon sells: Interconnect. Essentially it partners with the users to extend the network, in the same way GSM operators have roaming agreements; only the agreement is peering. You can roam onto my network for nothing if I can roam onto yours for nothing.

Will ISPs allow it? The market (in Spain at least) has probably moved past the stage where they could prevent it.
Bandwidth limitations and restrictive practices are less prevalent in developed markets, and those are the places that Fon will target. In Spain, if one ISP shuts it down, there is a good chance that Jazztel and Ya will pick up the churn, if Fon
is popular, that could be significant.

Sipping on halucinogens

I just read Paul Golding's take on Mobilisation and IMS (a little late!). He's a smart guy, so I was expecting some real concrete things I could get my hands around to justify why anyone is building IMS...
Well, I'm no wiser. Or perhaps I am. Paul says 3G is IMS, but then in his (long) article the only thing he mentions is SIP. He even interchanges IMS with SIP.
The formulas he uses tell the real story!

The Web = HTTP + Browser + HTML
SIP = SIP!
IMS=SIP + Some interfaces (e.g. [volume/quality based] billing)
3G=SIP + Presence
3G=IMS + Presence

That leads to the conclusion that IMS adds effectively nothing, from the customer perspective.
Given the cost of IMS and the proliferation of services that don't have or need billing interfaces (remember, we can still bill for access, presence and connection, without IMS!), what do we gain?
If IMS really adds nothing over SIP to 3G, then why on earth would anyone want to spend buckets of money implementing it!

SIP = IMS - something you don't need -> IMS = SIP

Implement SIP by all means, but move on to something more important...the customer.

Presence Futures

I want to know the future of Presence, as I think it has to be the most important aspect of Web 2.0 (or perhaps it's 3.0).
Why is Presence so important? Because it changes the way we use the internet, fundementally.
In the past we all connected to the web, through dial-up or via office connections or a few of us even had broadband. After connection, we used a browser to search and look for what we want. But we were alone. I would compare it to going to a library, sitting in a padded cell and having to request books via notes addressed to the librarian, who would then push the relevant book through a slot in the door.
IRC changed that by creating chat rooms where we could interact, and IM integrated the chat concept into our desktops and made it less intrusive.
With the introduction of broadband on a wider scale, people became 'always on' and the separation of presence as a non-binary feature came about.
So what is it, and what will it become?
Today, even the most presence-aware applications do little more than publish your current status, with the more advanced ones providing minor additional information such as integrating the title of the track that you are currently listening to on the radio. The IETF paper on SIMPLE (extensions to SIP for presence), defines the person in the presence data model as:
Person: A person is the end user, and for the purposes of presence,
is characterized by states, such as "busy" or "sad" which impact
their ability and willingness to communicate.
But presence is much more than that, it is the social enabler of the web, and it changes the experience we have in using the internet.
Presence is about answering the questions; 'Who am I?', 'Where am I?', 'What am I doing/thinking?' (Cogito ergo adsum ;), 'What do I like/hate/want?', 'How am I feeling', 'Where am I going (today)?' and finally 'Who are you?'.
Presence is is immediate and it's personal, it varies by social environment and it will be the thing that drives all of our interactions in the future.

A true presence application has to have all the subtlety of facial expression and body language. It must allow our friends to know more about us than strangers, and it must allow us to be intimate with the people we love.

But the really interesting thing about presence is that it defines our immediate future, and that's worth a lot of Googledollars...