Chip Griffin: Pardon the Disruption

Pandora Should Pay Up

I'm a big fan of Pandora. I listen to it on my computer, my Sonos, and my iPhone. It provides a fantastic service.

But ... I can't go along with the whining and moaning Pandora and others are doing about Internet royalty rates for music. Though it is a weekend, this Saturday's article in the Washington Post still touched off another round of griping in the tech blogosphere, including a broadside from TechCrunch's Michael Arrington. Some have even suggested that Pandora should be the sacrificial lamb in the battle against royalty fees, arguing that artists should view Internet radio as a favor to them and they should be grateful for the attention.

Rubbish, my friends. Artists deserve to be compensated when you play their works in their entirety. It's not as if Pandora and other Internet radio stations/podcasts simply play a 10-20 second snippet of a song and then link to a purchase option. Then you might be doing the artist a favor.

To suggest, as some have, that the royalty rate should be even lower than it is today -- or even non-existent -- is simply ludicrous.

The bottom line is that companies like Pandora have a revenue problem, not an expense issue. Less than three cents per listener per hour simply shouldn't be a heavy lift. Perhaps online users need to get over their mentality that everything should be free or ridiculously cheap. Someone has to pay for these services, and if advertisers aren't interested in stepping up, then users will have to pay.

People like Internet radio because of the lack or infrequency of commercial advertising. While we would all like to build businesses with minimal expenses, the reality is that it costs money to provide a service of any kind. The media business, in particular, is one that traditionally has fairly high content acquisition costs.

It's time for Pandora to find advertisers to support its cost structure -- or ask listeners to pay more. The $36 I pay each year for Pandora is a small price to pay for highly customized, ad-free radio service. It's just $3 per month. Certainly it would be worth at least $6 per month if it needed to double to come in line with the increased royalty fees.

If users are not willing to pay the three cents per hour in royalty fees, then perhaps there's not a real business here. Stop blaming the artists who seek to be compensated. Blame the Internet business mentality that minimizes the importance of revenue to growing companies.

Putting Things in Perspective

You don't expect to get lessons in perspective when you read the Boston Globe's Extra Bases blog about the Red Sox. But one post tonight delivered that message twice.

At the end of a notes-style piece, Nick Cafardo writes that former Red Sox backup catcher John Marzano died of a heart attack at age 45. I vividly remember the excitement I felt when I got his first baseball card, one from his stint on the 1984 Olympic Team, that was included in the 1985 Topps baseball card set. I actually liked it more than the Roger Clemens rookie card that was included in the same set (I can't even explain why 23 years later). He always seemed like a class act and was an easy autograph, which I appreciated as a youngster. Life is indeed too short, especially John Marzano's.

On a lighter note, the same blog post quotes Manny Ramirez of all people demonstrating that not every bad act requires higher intervention. In this case, it was his reaction to MLB suspending Yankees pitcher Kyle Farnsworth for throwing at Manny during a game earlier this week. Manny said it was unnecessary because it is how the game is played. Amen to that. Sports -- especially baseball and hockey -- would be better served if the suits let the players police the game rather than jumping to suspensions and penalties as readily as they do these days. That's not to say some vicious acts don't require severe penalties, but the players on the field and the ice do a pretty good job of keeping things in balance themselves when permitted to do so.

Both of these are lessons that we should take to heart off the field as well.

You Can Convince Yourself of Anything

Overheard while sitting in Union Station in Washington, DC this morning:

"If someone says not to use money they give me for booze, I don't do it. I put it in a separate place and only use it for good things. That's just the kind of guy I am. I'm an honest bum and honest thief. If you leave $20 on the table, I'm going to tell you. Some guys would just take it for themselves. Not me. I'm not going to hurt a guy trying to make an honest living. I only steal from companies ... Safeway, Giant, CVS ... I take them big. I hit them hard. I take thousands of dollars from companies, but never individuals. I'm just an honest guy."

Life 100 Years Ago

Those of us who seem to be living at the cutting edge of technology often don't take enough time to reflect on how quickly things change.  The point was driven home for me recently when my grandfather celebrated his 100th birthday and gave a speech about his life growing up a century ago.

It's worth taking a few minutes to watch and listen...

The Problem With Snacking

I have developed a bad habit.  I snack too much.  No, I'm not talking about in real life (though that's probably true, too).  I'm talking about in my information consumption habits. 

The Snacking Concept

A popular meme the past few months, popularized in part by a Wired magazine story, has been that consumers want information in "snackable" form.  That is, in bite-size bits that are easily digested.  And that's precisely what I do on a daily basis.  I read short emails using Gmail, skim through 140 character Twitter messages, and sort through blog posts using Google reader (most of which are but a few hundred characters in length).

Some Snacking is Good

On the one hand, these little chunks of information let me stay on top of a lot of topics at a very basic level.  I'm getting some of the "serendipity" that I often worry we are missing in our hyper-organized information society that those of us who qualify as early adopters seem to be living in.  For instance, I know that Britney Spears' 16 year old sister is pregnant.  I don't particularly care, but it's not a bad idea to be aware of pop culture at some level.

I Don't Want to Contribute to Your Snacking Problem

The problem with snacking, though, is that it doesn't encourage deeper dives into important topics.  It's one of the reasons why I have abandoned my old habit of putting up very short blog posts where I offer very little other than a regurgitation of someone else's information.  I still curate information, but through the use of shared links in my Google Reader, delicious tags, and Twitter messages.  For this blog, I now focus on longer commentaries, for the most part, and try to offer something original -- in information, perspective, or both.  No more "me too" posts here.  My other main writing outlet, Media Bullseye, explicitly discourages snacking and tries to provide more depth to all of its articles and commentary.

My New Information Diet Lifestyle

But that solves my contribution to the snacking problem, not a solution for my own habits.  That requires a bit more effort.  For one, I need to do a better job of reading books.  I still read a fair amount, but too often I go for easy reads designed to simply entertain or to read an important industry book to allow me to better address trends.  But I also need to read longer magazine articles and other more meaty content on a more regular basis.

Here, then, is the action plan I'm going to try to follow:

1.  Read More Books.  I'm already on a quest for books about the history of the media industry, but I have also already started to dig into other thought-provoking books like Charlie Gasparino's book (King of the Club) about former NYSE Chairman Richard Grasso (recommended by Brad Feld).  I'm going to try to stay away from glib business books that profess to offer general advice on how to have better meetings, hire better employees, or work more efficiently.  I have read enough of those to last me a lifetime.  I want to read about what real people have actually done.  I'm not a philosopher, I'm an entrepreneur.

2. Read Less Blogs. I started down this path by wiping out all of my blog subscriptions a few weeks ago.  I have started adding back slowly, but I hope to control my eagerness to add others.  It means a lot of friends aren't on my regular reading list anymore, and that pains me, but I need to spend less time in this arena and more consuming other information.  To help make sure I'm not missing interesting stuff, I am subscribing to more curators of information (notably shared items by Chris Brogan, Robert Scoble, and Bryan Person, along with Jason Hirschhorn's excellent Media Redefined feed).  I am also relying on Twitter for leads to useful posts, as well as emails from friends and colleagues.

3. Read More Article Content. Whether from newspapers, magazines, online journals, or elsewhere, I want to make sure that I am consuming more detailed written content from interesting people.  In some cases I am seeking content that may challenge my existing beliefs or make me uncomfortable.  In others, I'm looking for deeper dives on topics that I want to know more about.  And sometimes I'll read an article or commentary that provides information to validate my own opinion.  I think a good mix is key.  The toughest part here is to find the right stuff to read.  Most of the curators that I rely on point to blog posts and only rarely highlight more detailed information.  This is a problem that I haven't solved yet (which means it may turn into some sort of a business -- so watch out if you work for me!).

What say you?  Does this lifestyle change make sense to you?  What other advice might you give me or am I just completely off my rocker?

Government Idiocy, French-Style

Do you think any customer would turn down free shipping?  Of course not.  Yet the French courts have ruled that Amazon.com must charge its customers for shipping.  Why?  Because other booksellers have complained that it makes them look expensive by comparison.  Well, duh!

The problem here isn't that Amazon offers free shipping, but rather that French law restricts product discounting.  The answer to the problem isn't to pull the plug on Amazon, but rather to give other booksellers the flexibility they need to operate their businesses in a competitive manner.

When you look at the actions of France and other European government, it is a wonder that American companies choose to participate in those markets at all.  In some cases, the volume is simply enough to endure the pain and suffering the regulations over there cause, but smaller, more innovative companies will likely be loathe to put up with it.

Yet another example of why regulation stifles innovation.

The Power of Bad Service (A Tale of Weeks Without a Refrigerator)

Last week, my wife and I took our annual week away together.  It wasn't exactly as planned because one of my sons got a stomach virus just hours before we were to leave for the West Coast, so we had to wait to be sure everyone was OK before turning the children over to the grandparents for a week.  Ultimately we ended up with the better part of the week at a more local destination and had a good time anyway.

A week before we left, however, our refrigerator died.  Since it was a built-in Viking that came with the house when we bought it, we had to rely on Viking to refer us to an authorized repair company.  (Apparently most local appliance repair people won't touch these units because they are hard to fix.)

It took the repair people four days to even look at the refrigerator, and that was only after multiple calls and badgering.  Needless to say, telling the visiting grandparents that they would be without a refrigerator in the house while they watched two young boys for the week wasn't high on the list of things that my wife and I wanted to do.

Of course, when the day came it turned out to be some obscure part that was needed to make the repair and the repairman didn't have it with him on his truck.  Fortunately, they had the part in stock so it could be overnighted to him for installation.  Except that he was booked for the next 10 days and couldn't come back until then.  (By which time we would have gone on vacation and left the grandparents in a difficult position.)

So the repairman was slated to come today, our first day back.  But while we were on vacation, we received a voicemail and were told it would be Tuesday instead.  Today we got the call from the repair people telling us that the part had been sent to the original repairman but it would now be someone else coming.  And they have to figure out how to get the part to him. So it will be at least Wednesday and probably Thursday before we have any hope of having a working refrigerator.

And did I mention that the first guy concluded which part was needed by process of elimination only?  So it is possible that the new part won't even fix the problem.

The lesson here is that how a company deals with service issues is at least as important with how it creates and sells products.  While I live in New Hampshire, I don't exactly live in the boonies -- just minutes from the state capital.  The fact that a major appliance retailer like Viking can't work with repair people who can service dead refrigerators in a timely fashion is simply absurd.

Going nearly three weeks (and maybe more) without a refrigerator certainly makes me a whole lot less likely to go with Viking in the future. 

Technorati Tags: Viking, appliances, refrigerator, bad service, customer service

Congrats to Shel Holtz and Neville Hobson

Their leading public relations industry podcast, For Immediate Release, has just struck a sponsorship agreement with Ragan Communications.  I couldn't be more pleased for Shel and Neville and for the FIR community.

The deal includes promotion of the FIR podcast by Ragan, which makes it somewhat unique as sponsorship models go.  Hopefully this will help to expand the already considerable audience that FIR enjoys.

As a sponsor of the podcast for the past 7 months or so (hard to believe it has been that long), my own company, CustomScoop, has seen the value that this show creates.  I enjoy being a regular contributor to the show as well as a sponsor, and I look forward to Ragan's participation in the community.

Neville writes today on his own blog about the significance:

We’ve said it before many times - FIR is all about community.

Since we began FIR in January 2005, we have made listeners a constituent element of each H&H Report. Our network of correspondents - Lee Hopkins in Australia; Dan York in Vermont, USA; David Phillips in the UK; and occasionally, Eric Schwartzman in Los Angeles and Sallie Goetsch in the SF Bay area - are constituent elements of what FIR is.

We see our sponsors as constituent elements of the community, too. Now Ragan joins our current sponsor CustomScoop whose CEO Chip Griffin personifies what sponsor-as-community-member really is all about with the Media Monitoring Minute segment in each show.

Kudos to Shel and Neville for creating such a valuable resource for the PR and marketing community interested in the intersection of technology and communications. 

Technorati Tags: For Immediate Release, podcasting, podcast sponsorship, advertising, Ragan Communications, Mark Ragan, Shel Holtz, Neville Hobson, public relations, marketing, marcom, communications

The Digg Mob Reveals Childish, Wild West Side of the Internet

The blogosphere and the rest of the Internet offer tremendous opportunities for people to live, learn, and work better.  Great information resources exist.  Communications tools facilitate interaction.  And an entire infrastructure exists to enable creation of content, products, businesses, and more.  I thrive in this arena both personally and professionally.  I'm a blogger, podcaster, and CEO of a company that monitors traditional and new media online.  In short, I'm an advocate of the Internet and the promise it represents.

Unfortunately, there's also a childish, Wild West side to it all.  A vocal minority would have you believe that the Internet should exist without any rules except the ones that they choose to impose on others.  Like a spoiled child, they revert to tantrums when they don't get their way.

Yesterday, a company hardly known for its stodgy, traditional ways found itself at the center of a firestorm.  Digg removed a link to a post containing information on how to hack an HD-DVD copy protection scheme.  Some debate exists over whether the DMCA takedown notice delivered to Digg would hold up legally, but there's no doubt that sharing a copy protection code represents bad behavior. 

You may not like copy protection -- and this is a debate that has been ongoing since at least the 1980s -- but the fact of the matter is that companies have the right to sell their products in this way.  If you don't like it, there's nothing compelling you to buy it.  I've had my issues with copy protection and licensing schemes over the years.  It's often inconvenient and sometimes costly.  But it's a fact.  And the fact is also that piracy represents a serious issue for content producers and distributors. 

Unfortunately, a significant number of Digg users chose to engage in a digital temper tantrum in which they flooded the site with references to this copy protection code.  Digg surrendered.  Mike Arrington over at TechCrunch questions whether they really had much choice but to give in to the mob:

The users had taken control of the site, and unless Digg went into wholesale deletion mode and suspended a large portion of their users, there was absolutely nothing they could do to stop it.

I think Mike's right.  But that doesn't make the Digg Mob right.  Part of the reason why large companies and mainstream consumers remain leery of the Internet is the perception that it's the Wild West where anything goes.  Unfortunately, a significant number of Digg users decided to reinforce this image.

Because Digg capitulated, they have effectively reinforced the bad behavior.  Just as giving into your child when he's having a temper tantrum means that there will be more in the future, so too does this now effectively wrest control of Digg away from Kevin Rose and Jay Adelson and puts it into the hands of the Digg Mob.  Andy Beal does a nice job of describing this, as well, and discussing its implications.

Kevin tries to paint their capitulation as a principled stand against injustice: "You’d rather see Digg go down fighting than bow down to a bigger company."  That's good spin, but it's not the truth.  The principled position would have been to stand up against the Digg Mob and accept the consequences. 

Where does this bad behavior end?  If the Digg Mob decides it doesn't like paying taxes and some user figures out how to hack the IRS computer system, is it fair game to post that?  And who likes paying tolls? -- perhaps we can post a hack to fool the EZ-Pass system.  Or perhaps a tutorial on how to create a fake credit card that fools the movie theater machines into printing tickets for free? After all, why should a movie cost $15?

It's time to stand up against this kind of insanity.  The Internet promises freedom, not anarchy.

[For more reading on this point see Tom Peters from PC World who addresses the mob justice angle and Jeff Nolan who says you can't just ignore laws you don't like.]

UPDATE: Richard Koman over at SiliconValleyWatcher offers up an excellent post touching on many of the same themes that I did.

Technorati tags: Digg, Kevin Rose, Jay Adelson, Mike Arrington, TechCrunch, Digg Mob, copy protection, DMCA, anarchy

Ownership of Ideas in the Age of Information Overload

Jeremiah Owyang today writes an open letter to a speaker who apparently cribbed from his blog in making a presentation -- without offering any credit:

It’s a professional courtesy to cite others, especially if they’ve worked hard to get the knowledge that they have. Also, it adds to your credibility, as third party sources can validate your point. Since we’re in a very open community, people talk, and people will find out anyways if you use someone’s work without their permission.

First, let me say that Jeremiah is absolutely correct that if you directly take someone's information or ideas and use them in a presentation/speech/article you should attribute them.

The simplest case is in citing concrete information or data. If you copy something, you need to credit it.  But what about ideas?  I read hundreds of blogs posts every day, and I know that my thinking is deeply impacted by what I read.  I often find myself saying things -- perhaps a factual tidbit or a concept -- that I think I may have read elsewhere.  But if I don't recall specially, how do I cite it?

A simple case in point occurred last weekend with me and Jeremiah, ironically.  I had remembered seeing a particular photograph but I couldn't remember where.  I described the photo on my blog and the fact that I didn't know its provenance.  Jeremiah helpfully commented that it was from his blog, so I linked over to it so my readers could see what I was talking about rather than being forced to visualize it.

Obviously, I have no idea the circumstances that motivated Jeremiah to write his post.  I imagine it was something clear-cut and egregious.  But in a world in which many of us are reading huge volumes of material every day, ownership and attribution of ideas becomes a much more difficult concept to wrap our arms around.  It doesn't mean we should ignore it, it just means we have to work that much harder to be aware of the challenge and find ways to address it as well as can be done.

Technorati tags: Jeremiah Owyang, ownership of ideas, attribution, plaidgarism, intellectual property