Speculating on Facebook's next move Nov 6th in NY... just occurred to me but don't have time to consider in detail right now. Could Facebook do any better than to launch a SocialAds (social advertising network to Google's search advertising network) AND announce that SocialAds (but not Facebook.com) would support OpenSocial. Wouldn't that put them in position to reap the benefits of OpenSocial without giving up the benefits of their closed Platform?

Facebook vs. the Internet...that's what I spoke with new friend David Spark about at lunch day before yesterday. If you read my posts from when the Facebook Platform launched, you know I expected this to happen, but talking it over with him I was inspired to extrapolate a little more. What is new to me is the role Google is playing in pushing this process forward. Let's review the history shall we?

1. The internet became less usable as a communications platform because of spam and other burdens unsolvable by the open standards community. Meanwhile the private systems (namely the webmail providers) were busying them selves with "storage wars".

2. Facebook and MySpace emerge as closed recreations of the internet and are able to restore functionality be removing possibilities (constrained application environment).

3. Facebook "opens" their system setting off a frenzy of creative juice...pent up developer energy that had been waiting for internet standards to catch up with the platform needs of applications developers.

4. Google releases the OpenSocial open API standard and (new prediction) sets the Internet
back on the road to functionality as a communications tool.

Let's put recent events in context...most predictions were for Google to open up their own social network (Orkut) and other applications in the same way as Facebook. Instead what they have done is claim the mantle of fighting for the Internet, the original open platform, thereby reducing (if not completely wiping out the perceived advantage of Facebook's "opening"). That is to say they have reminded us that "open" isn't all that new. And the brilliant thing is that Google only benefits from this indirectly (more traffic on the web means more AdWords sales), but reminds us that in this regard: Google's interests are perfectly aligned with the rest of the Web ecosystem.

Let's put the other side in context also, Facebook fully expected this. That's why that even during the lead up and aftermath of the Platform launch the continued to say their primary value was the ability to best activate the social graph (not the Platform).

Now I fully expect to MySpace to come on board OpenSocial, but not to the exclusion of their own API initiative...and perhaps after some hemming and hawing Facebook will too (there are definitely advantages to staying closed for the time being). Hell Facebook has stated a need for a data portability solution and OpenSocial by it's nature is the type of implementation with the most portability.

And finally to give posterity to where posterity is do...all the credit for reminding the Internet what it means to be open goes to Facebook. Thanks for the kick in the pants, Mark.

(BTW, David describes his business as "creating an editorial voice for businesses"...just talking to him made me gab this long, so I imagine he's good at what he does.)

I just made a bunch of comments on a post Steve Rubel made on the "economics" of Web 2.0 where he tries to offer economic defense of his argument that "It's going to get very hard for advertiser-supported startups to get any scale when it comes to revenue.". I thought it might be useful to collect my comments here:

Steve misstates his point but in the way most people misstate it for shorthand:

A) As the supply of content rises, attention decreases and demand lowers - e.g. traffic thins

B) As the supply of ad-supported media rises, inventories swell - e.g. this equals less ad revenues

Supply and demand actually go "up" and "down" *independently*. What changes is the price at which they "meet" - the clearing price. To logically make the sort of point he is trying to make, he actually needs to hold either supply or demand *constant*. So to properly state his points (which are really the same point restated using different currencies to measure price), I suggested restating as follows:

A) As supply of content goes up & demand for that content stays constant, the price we are willing to pay per piece of content (in attention) decreases.

B) As the inventory of ad supported content goes up & the demand for that inventory stays constant, the price per unit of inventory goes down.

Important to note that in these scenarios, aggregate attention and revenue *may go up*, that is the economy may get bigger. It's the price per unit that goes down...hence a push for businesses to play for either efficiency (keeping costs low) or volume (aggregating many transactions).

Two additional things worth noting:

1. In the attention economy (the experience, media and entertainment industries) it is useful to treat demand as constant (i.e. "people only have two hours a day to spend on entertainment) because there is no substitute for the currency of time (we can make more money, but we cannot, as yet, make more time).

2. Even in the case that demand goes up (due to factors out side of the industry like shorter workdays leading to more entertainment hours), the point of these statements still holds even if demand increases, as long as it increases *less than supply*.

Finally, the least immediately relevant, but the most interesting thing to note is that it is possible for businesses to unlock markets within the attention economy (capture latent, unmonetized demand) as Google did with AdWords and as we intend to do with future products at ffwd.

Replacing "Fame Creation" with "Fame Transfer" is the next transition for the music industry.
A realization was triggered by the news of Radiohead's new album download pricing scheme: pay what you want, $1 - $100. This isn't a new idea, nor is it at all the first implementation of the idea. What's new here is that Radiohead, a band with singular brand power, is doing it. And that got me thinking...Radio head achieved that power through the tried and true machine of the record label. This is not to take away from the band's merit, but they surely didn't become famous despite their label's help. And looking at the handful of artists that have previously been lauded as vanguards of a new economics in music, we see they are mostly products of the old economics who now have freedom to exercise their manufactured power out of contract: Prince, Peter Gabriel, Pearl Jam and now (moving on in the alphabet) Radiohead.


What I realized is that for all the economic changes in the industry, the way in which fame (which in this industry is power) is created and transferred is still the same. I think it is finally time for artists themselves to start passing fame directly on to other artists in a mass way. This is also neither a new idea, or unimplemented. Starbucks music has had a very successful business of "Artist Picks" type compilations. But now with the rise of artist profiles on social networks, all now have the ability to do this with little monetary cost. The only thing at stake is reputation, and it takes a little time, too.

But what a huge difference it would make? We go from a chain of Label produces Artist produces money for Label who produces new Artist to a chain of Artist produces Artist. How elegant and efficient. All we need is a clever marketing genius to productize a way for artists to transfer fame to new artists directly using their fanbases on social networks. If you are such a
genius, give me a shout, I'd love to help.

James Currier (a founder of Tickle and currently of Ooga Labs ) is my hero for the week. On Wednesday we both spoke at the STIRR Founder Hacks event and James was by far the best of the three of us "seasoned" entrepreneurs who spoke. Not surprisingly he is the most seasoned, Tickle actually being a site that informed a part of the ffwd.com marketing strategy. Regardless, he had the best lock on the inspirational speaking style appropriate for the occasion.

Watch the videos and you'll see what I mean...

Scott Rafer and I both had interesting things to share, but James did an exceptional job of distilling his message to a simple take away, "hit it hard". I, on the other hand, tended toward the a Socratic lecture style and got complemented on succinctness and revelation (the a ha moment), but not for being particularly exciting. In retrospect, I think mine could have been, "You need people to bust your chops".

In passing let me also note that the STIRR crew put on hands down the best industry event I've been to all year, somehow allowing ample room for both "networking" and more substantial types of connections. It may be simply because everyone pays, except for founders (otherwise they are more likely to stay at the office and work!). But I also think there's a really collegiate vibe where cunning (i.e. name tag scoping) matters less than openness. Everyone I met spoke about why and how they do things, as opposed to most silicon valley events the focus seems to be about what you are doing and who you are. I highly recommend checking out their other programs.

We just reached out to the industry press for the first time and this was the result:

http://newteevee.com/2007/08/23/vadver/

So let me begin by saying, Liz gets it. She understands who our competition is, what sets us apart, what will be critical to driving early adoption, and even why some of our out there ideas might be good ones.

I also appreciated her willingness to engage in a conversation rather than just mining me for soundbites. Very classy. I'm looking forward to talking to her more about the general state of affairs in Internet video and what gaps we need to fill in order to take it to the next level.

Flattery is the highest compliment, right? Well, while everybody is trying to "compliment" Apple, iLike (along with Last.FM and MOG) should be doubly flattered that Apple is "complimenting" us. It's a classic turnaround from a company that has often succeeded in be a strong second or third mover in a nascent market: great for the ego, but really a threat with little if any upside.

Then again, it's not a first time dance with Apple. The biggest worry at the time was that Apple's use of the name would diminish our brand but while Apple's association name is more prominent among Apple's non-musician customers, almost every serious musician I meet (Mac or PC) still thinks of thinks of GarageBand.com first

The really interesting question is why is Apple doing this...now. We took a risk in launching iLike that Apple would very shortly thereafter copy us. However, we framed the iLike product with an eye to minimizing intrusion into areas that Apple might enter to bolster their main business (selling iPods) and secondary business (selling downloads). So these social widgets may appear to be a de-focusing of Apple's strategy.

I, however, think this is a sign that Apple is re-focusing it's product strategy for the iPod/iPhone on "social computing". Consider, the iPhone has wifi and an OS that supports widgets and that the next gen iPod will likely have both also. So while a "My iTunes" widget seems like a silly copycat on a blog sidebar, it becomes a serious threat if pre-installed on the next iPod and iPhone...even despite the less functionality, because it is one step closer to where people actually listen to music. (iLike is the next closest, with the sidebar). I suspect a this new refresh is not far off and will also compete directly with Helio and pick up where the Microsoft's Zune, uh, left off...but that's for someone else to speculate on ;)

I was struck this morning with a clear vision of the fundamental strategic battle going on among web technology businesses today. It allowed my to finally understand three often ignored oddities that I've had a hard time explaining away and I think provides a framework for predicting the endgame in this cycle of innovation.

Oddity #1 - Yahoo and AOL are still relevant.

Oddity #2 - Social networks duplicate their user's address books.

Oddity #3 - users ask social networks to spam them with notifications

Here's what I realized...computers even when networked are still information technology and webmail is *still* the killer app of the web, but the original successes (Yahoo, Hotmail, AOL and to a lesser degree Gmail) choose to fight a battle of attrition with each other rather than competing to be more killer. They've focused on spam, AJAXifying, storage...all interesting technical challenges that allow the people to email more efficiently, but they missed the opportunity to use new technology help people exchange information more efficiently.

Into that gaping hole stepped MySpace and Facebook, helping people keep up to date on each other's lives without the dreaded "mass email" (and at first without the fear of spam). They attached a face to every message. They reversed the spam problem, requiring consent/connection before allowing messaging. Conversation histories, co-messaging, subscriptions, the list goes on how MySpace and Facebook provided a more efficient, effective, and "safe" form of communication.

It is important to ascertain to what extent the email companies could have done these things. If the rumblings of secret social networking projects at Yahoo and Google are indication, a few months from now I won't need to answer this question,so I'll leave it until then. But let me note now that I believe the reason they didn't though they could is because email grew out of a standards based, universal world. I mean: what would the MIME type be for a "poke"? Social networks get around this problem by using the universal platform for as much as they could (the message notification) and confining the interesting stuff within their walled garden.

Let me be historically fairer, but more damning in the present. This almost happened to Yahoo and AOL before, but they pulled through. The interloper on email's turf as the communication tool of choice in 1996 was ICQ (I seek you) an Israeli company that provided "instant messaging" Luckily for AOL, they already had a product that could be re-purposed to create AOL Instant Messenger, and Yahoo was still young enough to internally develop their own competitor two years later. Five years ago they both added notification of email messages to the IM client and just recently completed the circuit by adding IM to the email client.

Whew! They can't take that long this time around. Facebook is a more formidable opponent than ICQ and less open to being bought. With the launch of the Platform, they've already leaped ahead to the next phase of communications development while AOL and Yahoo are still figuring out the current phase. But then again, old fogies like me still get almost all friend news via my webmail inbox, so Yahoo and AOL could at least stop the bleeding while they try to position for the end game: your personalized messaging first page.

Building a cross-platform application took on new meaning at the end of last week with the launch of Facebook Platform. In a sense what Facebook has accomplished is a tantamount exhibition of Tim Orielly's notion of "The Web As Platform", coupled with a brilliant competitive lock on, "Data...the Intel Inside". All of that is to be expected, thought they still deserve kudos for execution.

What's incredible is that Facebook has accomplished to created a microcosm that is per unit more valuable than the macrocosm it exists in. MySpace did something similar with the comment wall. It created a less functional microcosm of the the email macrocosm. Did you hear me? Less functional! The result was an application with razor focus on getting users to use it for the one thing it did do well...keeping friend's upto date on each other's lives.

Case in point is iLike's Facebook application which provides a handful of the features of iLike.com and is restricted UI wise by the limits of the Facebook API. It's growing faster and has more user engagement than the main site. Why? Simply because the iLike team is freed from building out a social network and can focus on building a music application. Moreover, Facebooks social functions are far more refined than iLike.com's (not surprisingly). In the end it is an application of basic competitive advantage theory: Facebook focuses on their strengths in the form of the social graph, iLike (and any aspiring Facebook developer) can focus on their social application.

Online video is like online music part two...

In part one I considered the habit of making comparisons between music and video that just don't apply. Most of the mistakes fall into this category. The flip side of this is missing comparison that they should. I think the largest gap of this type is not seeing that YouTube will follow a similar path and most likely suffer a similar fate as mp3.com and/or Napster.

MP3.com and Napster simplified and aggregated the free distribution of digital music. The were both acquired by and older media company struggling to get into the new space. They were sued practically into oblivion by the old media company's competitors, but not before transferring a sizable return to their venture investors. The are now a shell of thier former selves, revered brands with little substance.

I do think that this approximates the path YouTube will take, but it's not that uncommon or provide any strategic insight. The parallel that is interesting is what that path meant for the rest of the industry, namely that simple free digital music aggregation (which was their innovation of value) eventually became a commodity. This happens concurrently to when the easy win of redistributing previously created (and often pirated content) gives way to the much harder job of distributing the long tail (aspiring content creators) A adjunct to this that the creator userbase (as opposed to the consumer userbase), while a valuable early metric is ultimately of little comparative value because for a fledgling creative type, exposure is goal and that means putting your material up on every single competing website.

The story was, is and has to be big (old) media and small (new) media works are equal parts of the mix and shutting down the service was a control move by big media. The reality is that while in theory this was a level playing field, the majority of traffic was built on the backs of big media (not that that is a bad thing...except for the big media companies). This is a typical disruption, and big media very painfully had to cope by combination of suing, making deals, and buying. Eventually the margin for piracy gets eeked out and redistributed among the old and new media (it's all big at this point). The next phase is trying to build new value in the space (rather than redistributing old value) and that's all about the aspiring media producers locked out of the old media world.

Let me illustrate in the case of music. MP3.com and Napster rose on the prospect of letting people easily distribute their mp3s. Most of those mp3s were from signed record company acts, aspiring artists simultaneously saw an opportunity to "play on a level playing field". Distribution of record company owned material eventually got corralled into the iTunes Music Store retail environment, leaving the non retail space open for exploitation by non-record label artists. Simultaneously, clones/variations of MP3.com sprung up, not because they thought they hit it as big, but because they didn't need to hit it as big to be successful since the cost of starting up such a service was cheaper. And what did bands do? They put thier music on every single one of the sites. The companies that succeeded in this phase are they ones that put a compelling consumer activity on top of the band's contribution, most notably, MySpace.

We're now in the third phase of the music industry's evolution, what I think of as the reaggregate and recommend phase. Digital music is everywhere on iPods, on websites, on set top boxes, on FM radio even and most of these distribution platforms are now nearing equal access for all artists (but don't be fooled, money, and there fore record labels, still play a big role). Catering to the creator trying to get heard above the noise is an important mid game tactic, but the key goal has to be making sense of the din for the consumer (the goal of iLike).

You don't even have to look very closely (please note the lawsuit, if you haven't yet) to see that regardless of whether YouTube dies the same agonizing death that MP3.com and Napster did (the big buffer being that Google is quite as under-innovative as the record labels were, yet), the industry that is growing up around them will follow this path. And it is going down this path much more quickly.

Online video is like online music (mostly) because TV networks are like record labels (except when they are not), but video is not at all like audio (despite being created the same). Confusing? Such is the attempt to draw parallels between disruptions in the various entertainment industries. On a very high level digital video is repeating the history (in the Hegelian sense) of digital music (and for that matter digital text), except at a much quicker pace. However at any level of detail, you see that the story of online video defies blithe comparison to the story of online music.

For instance, Apple TV shipped this week to many pronouncements that it will do to the video industry what the iPod did to the music industry (for instance Carl Howe). Such pronouncements reflect a relative ignorance of the iPod's place in the disruption caused by digital music and a complete ignorance of how different the case of video is from the case of music.

First of all, let's distinguish between what the iPod gets credit for (unbelievable) and what it actually did (still pretty remarkable).

It did not create the mp3. It did not develop the first digital music player. It did not solve the interface problem for small devices (don't believe me? decide for your self; Apple already decided). It did not even make paying for downloaded music commonplace.

It did bring all these things together into one well designed package, but most importantly it made digital music desirable to the average consumer and for that it built upon the success of iTunes (the program, not the store) in making digital music accessible. This was no small feat. In 2001, digitizing the music you already owned was a chore even for the technically literate and iTunes brought it down to "Rip. Mix. Burn". Shortly thereafter, they released the iPod to provide "1,000 songs in your pocket", the brilliance of which was not even recognizable to Mac enthusiasts. This one-two punch improved upon two things we all loved dearly: our existing music collections, and our original tape-based Walkmans. Once Apple, repeated this combo for the Windows platform, the lock was complete.

Wow, we said, ripping is just like making tapes from our CDs and LPs and iPods are like Walkmans except without all the manual actions (fast forward, flipping the tape, carrying multiple tapes). The experience and therefore the desirability leapfroged the CD player starting from the first revolution in portable music (the Walkman). The music industry has been unable to accommodate the shifts in mentality and demand that arose from consumers desire for a digital music lifestyle...and has suffered greatly for it.

AppleTV, while noteworthy technology in it's own right, doesn't fit into the story of video the same way the iPod fits into the story of audio. While the iPod allowed us to easily digitize content we already own and take more of it with us into activities we could take it into before, Apple TV lets us buy content we used to get for free and watch it in the same place we used to. Huh? Some may argue that this allows "time shifted" viewing and breaks down the advertising model of television, but this has already become common without need of additional hardware or per show costs via PVRs provided by cable companies. Some may argue that this let's media on my computer (presumably photos, music, and home movies) be accessed in my living room, but what precedent is there to say that is desirable...at best it remedies a backwards compatibility problem. Apple TV just doesn't have the character dressings of the iPod.

You can't equate the iPod to Apple TV without a huge counter-factual caveat: that the iPod would need to plug into your existing stereo system to work. But you know what would be equivalently game-changing? A 30-inch+ iMac form factor device with the guts of the Apple TV, plus typical flat screen TV inputs and a PVR function. Now that would be worthy of being called Apple TV.

The iPhone is not for me :( That was my initial reaction to the product announced at Mac World and after trying hard for a few weeks to convince myself otherwise, my lack of interest wouldn't budge, so instead I spent the next few weeks trying to figure out why.

Why is it surprising that I don't want this phone? Any one of the following facts would be sufficient evidence, but taking them all together will really make you scratch you head:

• there are four Macs in my house, one G3 iBook (bought used) that was until recently my primary work computer, an iMac G4 that handles all media duties (with the help of an external hard drive), a late model G4 PowerBook that my wife uses for school, and the brand new MacBook pro I'm now typing on.
• I'm a happy Cingular customer. I know a lot of people wanted the iPhone to be unlocked and multi platform (GSM, CDMA, iDEN even). That would have been a neat coup for Jobs like getting the all the record labels to go in on the iTunes Music store, but not really relevant to me. I'm on Cingular and receive good service (though that might have something to do with me being a legacy AT&T digital customer).
• I am not opposed to shelling out money for a phone. In fact, I bought my current phone in India for full price even knowing that a similar phone would eventually be released for Cingular in the US with heavy subsidy. I wanted it immediately and knew Cingular's version would have features turned off.
• The phone I bought is a smartphone, in my opinion the best one for business use, the Nokia E61: great OS with superb support for open standards (Reuters, Gmail and Google Maps run without a hitch), the best browser i've seen on a mobile (if you haven't seen it you should really go demo it and note the iPhone browser is built on the same platform, WebKit), great display, info dense standby screen, Nokia's high quality build and feel, comfortable thumbboard (I compared to blackberry, moto Q, and HTC's offerings for cingular), very rich bank of built-in applications (mail, calendar, contacts, etc.)

The one exception is that I am not an iPod user. I did have a low capacity nano for a while, but didn't pay for it (company Christmas gift one year), and after it died (it got run over, but amazingly worked for quite some time before kicking the can), I didn't replace it. The reason for this is simple, when I'm mobile with my phone, I'm almost always always answering email (yes even more often than I am talking on the phone). The iPod was nice for the brief train ride to the office, but I don't miss it as long as I can answer my email. At the end of the day there is very little new about what the iPhone does and frankly existing players do those things better.

There is one thing that excited me about they way Apple is doin things...it's the same thing that got me to switch to Macs...the operating system. Now I'm not talking about the touch screen interface which is pretty nifty, but I'm talking about their claim that it runs a special form of OS X, the same operating system in their desktops and laptops. Putting aside what a great benefit this is to developers, I am most excited about the prospect of interoperability between a four inch handheld device and the four macs in my house.

Which leads me to describe the product that I wish Apple would make: the iPhone without all the mobile phone features. This isn't a reduction back to a plain ole video iPod because it runs OS X and has a wifi connection. Imagine if they replaced all the mobile phone features with a VOIP client, created a slick remote login/filesytem, and souped up iTunes and iPhoto to allow remote control/media streaming fuctions (like the Sonos remote). That would fill an actual gap in the computing landscape.

Such a device would, for instance, allow me to do something you think would be simple, but isn't possible given Apple's current hardware: change what song I'm streaming to my Airport Express in the living room without walking to the kitchen where the computer that stores the music is. They could call it the iPalbecause it would be a mobile assistant for the digital home (can I coin that?).

Happy New Year everybody! I usually refrain from reporting news in this space, preferring to comment on the news, or comment on other people's comments on the news. But what I want to share today needed to be kept out of the public eye and so there is no news about it to comment on...until now.

I'm starting a new company!

It is still stealth under the name Vadver and I invite you to visit http://www.vadver.com to sign-up for our private alpha. We are on track to release in February, but will be sending info to alpha testers as early as next week.

If you think this is what prompted me to expand the focus of this blog to include video, you are correct. And, if you are wondering if this means I am leaving iLike, you are also right...kinda. I'll be moving to the Advisory Board (Sir George Martin is now my boss!), but will be working full time on John Doe (see last post for translation). Lastly, if you are dying of curiosity as to what the new site is about...just visit Vadver.com to get a glimpse and request more info.

Merry Christmas iLike, Gcast, and GarageBand users and other music lovers (i.e future users). Actually, Christmas came a little early this year. On December 20th, 2006 iLike closed a $13.3 million dollar investment from TicketMaster! It is a high point in a way, but more importantly it is a launching pad for far greater things...like landing on the Moon on the way to Mars. We just had an offsite to plan our trajectory (shh, it's a secret) but I thought it would be interesting to survey what other people think we will or should do:

• Michael Arrington at Techcrunch is almost protective in his requests for restraint, which feels great since Techcrunch was one of our hardest to win over critics early on.
• On the other hand we've still got some more work to do with the crew at Idolator. They clearly chafe at Tickmaster's dominance of their space, they think our plug-in is bloated, and they think the deal is, uh (and I think they are being polite here), "curious".
  
• Paul Lamere does the math and arrives at a user base goal that is on the modest side of our aspirations: 1.4 million people.
• And last but not least my favorite, Rick Munarriz at the Motley Fool gives a brief history lesson on our trip to the Moon and recognizes the implication of that trip our launching pad for the stars.

Well, with $13.3 million in the bank and a great team on the ground, we hope to give y'all lots more to talk about in 2007, and even better stuff to listen to :)

Seems like everthing is going John (Doe, rhymes with video), these days:

• Om Malik just launched a new blog, NewTeeVee that aims "to cover online video from end to end and front to back."
• There seems to be no end in sight to the parade of "we'd be happy with one percent of YouTube's market value" companies.
• And now my blog has extended its focus to include all media types (i.e. video).

On the other hand, the scope is now mostly confined to the "long-tail" aspect of the equation. Of course, the line is increasingly blurry, but what I used to generically refer to as the "long-term", I'm increasingly convinced is represented by the "long tail".

Okay, so I know I've been a little heavy on the boosterism lately, but come on, can you blame me? We've really been rocking it recently. We have the pictures and video to prove it. (That's me in the hat)


Here's another example. This blog was noticeably silent on GooTube. But that doesn't mean I wasn't thinking about it. I was thinking about it a lot, like starting to lose sleep over it. I hadn't written my thoughts here because that would reveal key strategic concerns for my companies. But here a month later, I am able to share them with you? Yep, because the team in Seattle has already acted on them. How cool is that?!

It's not worth me getting into a general discussion of GooTube: I largely agree with Mark Cuban's (emerging) take on the deal, so rather I'll link to him for general analysis. Instead let me share with you an excerpt from an internal email on the subject I sent on October 19.

I think it's pretty clear that the recent GooTube deals with the record labels significantly changes the landscape for the music industry for the immediate future. They essentially did something I'd been suggesting would be the best strategy for someone trying to compete with Apple: get the freedom to remove DRM by prebuying music just like a physical distributor. (Quick note on why this makes the difference: it shifts the risk to the retailer and gives them pricing freedom)

Today's post by Mark Cuban made me realize that GooTube has essentially done this *and* chosen to make the marginal cost to consumers zero (vs $2 on iTunes). Wow!

What this means is that for the time being (the term of their deals with the labels) we have a grand playground for experimenting with a world in which music content (videos at least) is "free".

My recommendation is immediately expand the "free download" functionality on iLike to encompass mainstream music by:

A) adding support for YouTube music videos to iLike.com pages

B) adding a "convert for iPod" function to the sidebar or icast (assuming there is manageable copyright liability).

I think the YouTube support on iLike.com gives us a leg up on MySpace and from his post I infer Mark thinks the iPod function one ups Apple

Two weeks later on November 2, I get word from Hadi that's he's figured out how to accomplish suggestion A. You should really read the post Steve made on the team blog for the whole story, but lets excerpt a bit of it here:

It started on Thursday. After scooting into work I walked upstairs to the office. I was preparing myself for the day, planning to fix a few bugs and get ready for a new feature Josh and I were about to start working on. As soon as I walked into the room I knew something was up. I got that 6th sense feeling of a new idea about to hatch. Sure enough, I saw Hadi waving his hands over in Josh and Gabe's corner of the room going on about something (our "office" is an open floorplan that is just barely, but not quite, big enough for all of us).

"Not just music clips", Hadi was explaining, "but music videos!". I got his drift, and sat down to mock something up. It should be noted that Josh and Nat had been talking about something similar months back, but neither of them were *this* enthusiastic about it. In his typical eager fashion Hadi had mentioned it was only a "3-hour project", so the challenge was on!

They shipped it on November 7.

Let me pause to bring special attention to something in Steve's post. My story starts from an email I sent in October, but "Josh and Nat had been talking about something similar a month back". To clarify, I do not claim that we are the originators of this idea (and also that I was not the first person in the company to suggest it). I know of three sites that already did something similar: ilovemusicvideo.net, djodjodesign.free.fr, u-lik.com. To wit: the idea isn't that remarkable.

What is remarkable is our timing and execution. This idea had been out there for months, at least. Then GooTube happened. We quickly analyzed the strategic implications and identified the resulting opportunity, had the technical intuition to anticipate a user need, and shipped the feature in less than one month after the precipitating event. No less than 5 people were invloved in the chain each one adding tremendous value.

Yes, existing users love the new feature. Yes, we saw a spike in traffic. Yes, other companies are left scratching their heads. We're on a roll and I'm loving the ride. So please indulge me for a moment while I bask in the warmth of a more flattering followup article in Techcrunch that anticipates my suggestion B. I've already added a wireless video iPod to my Chirstmas list so I can enjoy all the videos of my favorite songs automatically found and loaded.

What's the difference between the best music you've never heard and the best music you have heard? Apparently the answer to that question is not obvious, as evidenced by the recent article by Techcrunch writer, Marshall Kirkpatrick.

Quote Marshall:

"while many of us may be interested in discovering new music similar to our existing tastes - the lower production quality and lack of familiarty [sic] with independent music makes it less popular for more reasons than just limited distribution. Most “independent music” is not very good."

and

"I find that the sheer majority of so called “indie bands” just aren’t very good."

and

"On musical tastes, the new features are all about indy (sic, lol) music, which I am too often disappointed in."

The fallacy of these statements is that you can remove the word indie or indy [sic] from any of them and they are still true. Only 3% of artists reach a modicum of successful record sales and even fewer are profitable franchises. Given these statistics, the word "indie" as used by Marshall is completely empty. Even U2 was once an "indie" band that famously didn't know how to play their their instruments and couldn't get most people to listen to their music. Sir George Martin, who discovered the Beatles, recognizes that the next worldwide hit band is right now a nobody in a garage. That's why he supports GarageBand.com. Well that and he doesn't think the traditional ways of discovering music are going to be successful at finding them. Yes, Marshall, most music is "in progress", and "indie" until enough people find it to be enjoyable that it's no longer "indie".

And that's what's really at issue here, Marshall seems to prefer the erudite opinions of aspiring "music critics" at HypeMachine to any sort of analytical system of making recommendations. He disagrees with George Martin and the millions of people using Last.fm and iLike.com. He believes ultimately that music should be chosen by "experts".

If I'm I'm misconstruing his position, it is only because I am giving him the benefit of the doubt. I'm assuming that his reasons for liking HypeMachine are exclusive of characteristics shared with iLike/GarageBand. For instance, it can't be because Hype Machine reviewers write long commentary on the tracks. Otherwise how could he not at least respect the GarageBand system where reviewers are expected to leave detailed commentary on hundreds of thousands of tracks? It also can't be because he prefers recommendations from real people, since that is the primary activity on iLike as explained to him in comments by Ali.

So what's left to differentiate HypeMachine and therefore define Marshall's opinion on the big question? He likes the tastes of the bloggers at HypeMachine? No, if that was all, the smart thing for him to do would be to invite those HypeMachine bloggers to be his Friends on iLike. Then he would not only know about what they chose to write about, but he would know all their other favorite songs according to how often they actually listen to them. I mean, what is iLike if not a huge enabler of lightweight, automated mp3 blogging.

The difference of opinion arises because underlying Marshall's position is a distrust for the democratization of tastemaking. He doesn't have a problem with experts per say, but he just doesn't like the current ones (the big record labels) and would like to have some that fit more closely with his own tastes (a totally reasonable desire by the way, just not one he will be able to impose on the rest of us). This is also evident by his nod to Pandora (who use bonafide experts, Phds).

Let me return to my original question by quoting the last paragraph from Ali's comment:

"It is hard to believe that I [Ali] find myself having the long-tail debate with a blogger. Not long ago, professional journalists claimed “blogs are amateur and bad journalism,” and people like you [Marshall] proved them wrong. The same applies to music, as Internet distribution and cheaper recording tools are changing the game. The only difference with music is that systems for enabling the best indie music to rise to the top are still being refined."

I think part of the problem is that the long tail metaphor is a useful one to describe the vast majority of amateur activity on the internet, but that is not what we are talking about here. What we are talking about is aspirational activity: the effort by newcomers in a medium to use new technology to make an end run around the "oldies" and the systems set up to protect "quality" (or their hegemony depending on your perspective). Bloggers like Marshall and the bands on GarageBand aren't content with being part of the long tail. They want to launch from the long tail into what Mark Cuban recently called the "vert ramp". The want to move from being the best unknown media to being the best media, period.

If I have succeeded in teasing out the subtleties of Marshall's position, then the argument between us is really a dialectic to be resolved by history. He (and to a lesser extent Pandora) represent the conservative side: that the project of new media is to replace old experts with (more and younger) new ones. Last.fm, iLike, Ali and I represent the progressive side: that the project is to replace experts with something new and better, organic and social filters.

Last week we launched iLike.com, a long jab right into the future of music discovery. Today we launched the GarageBand Faceoff, a right hook square in the jaw of music promotion, knocking loose any preconceptions you still have about the music industry:

• Thought you had to choose between grassroots empowerment and mass media distribution? The GarageBand Faceoff has two bands chosen by the public at garageband.com squaring off against each other on a nationally distributed FM radio show.
  
• Thought a bands only choice was to sell their soul to a record label or toil in anonymity? Bands who win five times in a row on the GarageBand Faceoff face a real choice: $25,000 or proceeding to the finals to compete for a $100,000 recording contract
• Consolidation turning radio radio playlists over to corporate control?The GarageBand Faceoff is your four minutes of freedom. The listeners vote by text and the web to decide which songs we play the next day.

Oh yes, those are fighting words. And after that one-two punch, well, the status quo can just bring it.

You can hear the show and find out where it is airing at www.garagebandfaceoff.com

Congratulations to the iLike Team! Yesterday they launched into beta...iLike.com. As you might expect from my gushing about the team up there in Seattle, they've exceeded even my wild dream for how something like this could work. Sometime when I'm not so busy, I'll try to biograph the ideas involved, but right now I've got a radio show to premiere.For now, you'll just hafta be content with being able to see my music tastes at a glace (see the new iLike widget in the right hand column). Besides, it's the iLike Team's day, go read thier blog.

Why is Spiral Frog a neat development but ultimately irrelevant? Because it misses the point...or rather three points:

1. Apple sells music so they can sell iPods - iTMS is a service that makes the iPod, nearly everyone's favorite mp3 player, that much nicer and oh btw it locks you into the Apple ecosystem (note: I'm note sure what the stas are, but I can't believe that any more than 5% of music on iPods are from the iTMS). Spiral Frog's service does not provide any listening experience on the iPod nor provides a comparable listening experience on any other platform. To put it another way: it's just not nearly as stylish, addictive, or fun as donning white earbuds, endlessly running your finger around a wheel, or falling into click and skip bliss.
2. Discovering music is a contextual experience - I read somewhere that Spiral Frog may not plan to compete directly with the iTunes music store, but instead think of themselves and providing full song previews in exchange for ads. Huh? On the one hand, this explains why the DRM (6 month expiration without coming back for ads) is so onerous...at least Apple's FairPlay scheme gives the perception of owning the music. On the other hand who is the market for this kind of service? Most people are quite happy with 30 second clips and psychological experiments indicate that we form attachments to songs/recordings in much less time. More importantly (and this may only appear so for lack of detail in the press), the "full length previews" are found actively not passively and without context. By contrast, you could see Yahoo Launch as a "full length preview" service (i.e. radio) that is passive with personalized context.
   
3. Costs come in many different currencies - How can you possible say that listening to a single 90 second ad is "free"? Sure I don't pay any money for it, but listening to 90 seconds of anything is a serious cost. Radio ads are only 15 to 30 seconds long for a reason. We don't even make GarageBand reviewers listen to more than 90 seconds of a song they don't like before allowing them to rate it down. And this isn't 90 seconds every once in a while (on Clearchannel radio you get 4 songs for every 90 seconds of ads). this is 90 seconds of ads for every song. Granted it's only the first time you listen to it, but can you imagine what an enormous brake on usage that will be? Click. 90 sec ad. 30 sec download. Listen. That's so far away from a recipe for rinse and repeat, I can't even begin to even consider the finer points of why this is a bad user experience. And forget about capturing the long tail (unobtrusive AdWords these are not).

So my advice to the Spiral Frog team (which seems to have pretty sharp people and therefore, I wouldn't count them out just because of one burst of, probably erroneous, press).

1. Integrate with a single music player and get a cut of the hardware sales.
2. Recreate the personalized radio experience of Yahoo Launch on a that player
3. "Sell" the music in bundles such that I can listen to multiple songs in a row before being interrupted by ads (and try to lower your "price" point to something more in line with radio while you are at it)

At the very least this will give them a chance at capturing the market Satellite Radio has (small but at least a market that has real people that fall into it) and potentially a shot at creating a truly novel form of distribution.