In case no one has noticed, I have taken a break from blogging due to summer vacation. However, I will return in the Fall to continue bringing news and updates on the changing world of the internet.
Year: 2008
Record Industry 2.0
I have been following the musical rise of one of my closest friends, Geoff Sarubbi aka OnCue. OnCue is a local artist from my home town of Newington, CT. I remember listening to his first released songs that he produced on his computer at the age of 13. The difference between then and now is nothing short of monumental. It’s amazing how maturity can be heard in a song by the beats, lyrics, flow and cohesiveness.
Currently OnCue heads up his own record company called Game Point as well as a design company called GPXO which does promotional flyers and cd covers for other aspiring artists.
Almost most of marketing and exposure that OnCue has made was through the internet, especially through MySpace. This is a very popular trend rising amongst young artists who wish to bypass record companies and spend thousands of dollars on promotion that is not as effective towards this new internet generation.
This is OnCue’s latest single, Dancin’ On The Bar, which was released just this week.
A new world where “free” really does mean “free”
As I was growing up, my father always said that nothing in life is free. One way or another you have paid for it or will pay for it. Interestingly enough, many new start up companies are relying on the “free” business model to propel themselves into the market. This article from TechDirt covers this new business model.
Why Do So Many People Freak Out When They See ‘Free’ As Part Of A Business Model?
from the divide-by-zero dept
A bunch of folks have been sending in a blog post by entrepreneur Hank Williams apparently attacking the concept of “free” and blaming venture capitalists, saying that they’re overfunding a bunch of startups allowing them to give away stuff for free and distort the natural market. There’s a lot of things that are incorrect in his analysis. Let’s go through a few of them. He kicks it off by suggesting that it’s “inherently impossible to start a small self-sustaining business,” though there are numerous small online business owners who would disagree with him. It’s not inherently impossible at all. In fact, I’d say it’s rather common.
He then claims “in the digital world, advertising, the only real revenue stream, cannot support a small digital business.” This appears to be wrong on two counts. First, there are numerous small online businesses that are supported by advertising revenue. But, more importantly, the idea that advertising is “the only real revenue stream” is inherently wrong. Advertising certainly is one revenue stream — and an important one at that — but there are many business models where you can make money by leveraging “free” to make scarce goods more valuable. Advertising is one such business model (using “free” content to make someone’s scarce attention more valuable), but it’s hardly the only one.
Williams then yanks out the old line that “it is very hard to charge when your competition is free.” That, of course, is ridiculous. It’s the same thing as saying you can’t compete. In a competitive market, prices will get pushed down to marginal cost, no matter what (driving out all profit), so businesses that survive innovate, in order to get an advantage above the marginal cost in order to profit. That doesn’t change if the marginal cost is $0 or $10,000. The trick is merely in knowing what scarcity you can sell that can’t easily be copied. If you’re trying to sell something that is easily copied, then you’re selling the wrong thing. You have no competitive advantage. That’s not anyone’s fault but the business owner. In fact, the only fault I’d pin on VC’s is if they pushed their portfolio companies to go against these basic economics.
Finally, he says that a bunch of these companies embracing “free” need to die and then “with less “free” floating around, a more regular supply and demand dynamic can take hold.” But that, too, is incorrect. The supply and demand curve includes a price of $0, and when the supply is infinite, the supply curve is flat at the $0 line. So, the proper supply and demand dynamic has taken hold: and it says the price should be free.
This isn’t to pick on Williams, as others have made similar arguments in the past, and I’m always interested in understanding why people are so confused by this. In the end, I can only assume that it’s a “divide by zero” problem. For most of history, it’s been shown that people naturally have trouble understanding the concept of zero. We may think we do, but as soon as a zero enters an equation, people tend to freak out and assume a model is broken. Yet, if we trust the model and realize it’s not broken — good things start to happen. Many businesses have learned that they can embrace “free” not because of a bunch of VC funding, but because that’s the natural economic state of the market, and it allows them to make many, many other things more valuable. The real business trick is in making sure those things that are made valuable are what you’re selling.
by Mike Masnick
Fri, Apr 4th 2008 7:41pm
A more visual look at what web 2.0 is
While searching on Digg.com I came across this great intro video into what web 2.0 is. I would highly recommend anyone who is introducing web 2.0 to their workplace or classroom to use this video to convey how web 2.0 has developed and why there was a need for an evolution in the way we used the internet. Created by Michael Wesch this video explains why HTML became obsolete as a way to program websites and why a new language, XML is so powerful and enabled the web to become the web that we love today, a used based and influenced network that sustains life only through our interaction.
[kml_flashembed movie="http://youtube.com/v/NLlGopyXT_g" width="425" height="350" wmode="transparent" /]
Blackboard Wins Lawsuit Against Desire2Learn
A tool we all use here at Suffolk is BlackBoard. It provides great communication between professors and students outside the classroom. This article explains a recent lawsuit in which BlackBoard won against Desire2Learn. The article raises a good question of whether or not educational tools should be for profit companies?
Blackboard Wins Lawsuit Against Desire2Learn
2/22/2008
By Dian Schaffhauser
Blackboard has prevailed in an e-learning patent dispute against Desire2Learn. A federal jury in Lufkin, TX made the determination Friday afternoon, following a two-week trial. Blackboard was seeking $17 million in lost revenue, as well as an injunction against the company, which is based in Canada.
After a day of deliberation, the jury found the patent valid but suggested that Blackboard should be awarded only $3 million, according to coverage posted on Desire2Learn’s Web site.
During the trial, Blackboard called as an expert witness, Mark Jones, a professor of electrical and computer engineering at Virginia Tech, earlier retained by the company to prove the specifications of its patent and dissect the counter-claims by Desire2Learn.
Desire2Learn called as an expert witness Fred Hofstetter, a member of the faculty at the University of Delaware. Hofstetter created Serf, a Web-based distance education environment first introduced in 1997, prior to Blackboard’s introduction of its own virtual learning system.
Following the judgment, Desire2Learn quickly moved to reassure its customers that business would continue as usual. “There is no immediate threat to you our clients,” wrote John Baker, Desire2Learn president and CEO, in the prepared statement. “We will work with you to ensure there are no future issues. We are financially sound and are confident of our ability to work through this matter.”
The company said it would continue to challenge the patent’s validity and Blackboard’s charges of infringement. The United States Patent and Trademark office will be reviewing the patent.
Dian Schaffhauser covers high tech, business and higher education for a number of publications. Contact her at dian@dischaffhauser.com.
Dian Schaffhauser, “Blackboard Wins Lawsuit Against Desire2Learn,” Campus Technology, 2/22/2008, http://www.campustechnology.com/article.aspx?aid=5879
Social Media in the 90’s
This is an interesting article that compares web 2.0 standards that we all use now with what their equivalents were while we were growing up throughout the 1990’s.
What is Web 2.0?
The internet has evolved into something more than many of us could ever predict. Information is instantly retrievable and knowledge has become limitless. One of the emerging ideas that has gained a lot momentum is user-end interaction with websites. Web developments like MySpace and Facebook are a few examples of how the internet community can come together to form something bigger than a team of web developers could ever produce on their own.
And simply put, that community production is what web 2.0 is all about. Web 2.0 was first coined by Tim O’Reilly at the 2004 Web 2.0 conference (1) as a defining phrase for the second generation of the internet, a collaboration of the many ideas of users all over the world and their contributing efforts to wikis, blogs, social networks and folksonomies.
Many businesses lately have been evolving into 2.0 standards. A company that I have grow and develop is Revision3. Revision3 is a completely web based television studio aimed at developing web shows that are on demand, high quality and professional. Their aim is to revolutionize how companies can broadcast series and shows on other mediums rather television. Despite Revision3 shows being only shown online, companies such as Netflix, Microsoft. Sony and GoDaddy.com have been paying up to $10,000 an episode for advertisement (2).
Revision3 is a great example of how to utilize the broadband speeds of the internet along with user requested content to provide viewers with a tv like viewing experience that they cannot receive from their television provider.
Question to readers:
Do you feel that the internet is developing in a productive way? Are applications such as facebook or online video services like Revision3 necessary tools that help develop connectivity between people? Are these new developments a response to our lack of satisfaction with the previous generation of the internet?
(1) http://www.oreillynet.com/pub/a/oreilly/tim/news/2005/09/30/what-is-web-20.html
(2) http://money.cnn.com/galleries/2007/biz2/0702/gallery.nextnet.biz2/9.html
Introductory Post
Thank you for visiting my blog.
As technology develops and information about us becomes public many companies are looking to adapt to this new fast pace digital world. Technology is being streamlined and our lives are being digitized. The power of Google has enabled prospective employers to find out much about you within minutes. Reputations are being put on the line based on how the outside world sees your facebook, myspace or even your blog. New technology and resources come with responsibility. This blog will discuss proper internet etiquette as well as introduce you to the new arsenal of business weapons available to us today.