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Prince, to the Mirror:

“The internet’s completely over. I don’t see why I should give my new music to iTunes or anyone else. They won’t pay me an advance for it and then they get angry when they can’t get it.

“The internet’s like MTV. At one time MTV was hip and suddenly it became outdated. Anyway, all these computers and digital gadgets are no good.

“They just fill your head with numbers and that can’t be good for you.”

Dr. Weinberger responds:

Breaking News: The Internet Declares Prince to be Completely Over

Now we can party like it’s 2010.

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@robpatrob (Robert Paterson) asks (responding to this tweet and this post) “Why would GBH line up against BUR? Why have a war between 2 Pub stations in same city?” (In this tweet and this one, Dan Kennedy asks pretty much the same thing.)

The short answer is, Because it wouldn’t be a war. Boston is the world’s largest college town. There are already a pile of home-grown radio-ready program-filling goods here, if one bothers to dig and develop. The standard NPR line-up could also use a challenge from other producers. WGBH is already doing that in the mornings by putting The Takeaway up against Morning Edition. That succeeds for me because now I have more choices. I can jump back and forth between those two (which I do, and Howard Stern as well).

The longer answer is that it gives GBH a start on the inevitable replacement of signal-based radio by multiple streams and podcast line-ups. WGBH has an exemplary record as a producer of televsion programming, but it’s not setting the pace in other media, including radio. The story is apparent in the first four paragraphs of its About page (which is sure to change):

WGBH is PBS’s single largest producer of content for television (prime-time and children’s programs) and the Web. Some of your favorite series and websites — Nova, Masterpiece, Frontline, Antiques Roadshow, Curious George, Arthur, and The Victory Garden, to name a few — are produced here in our Boston studios.

WGBH also is a major supplier of programs heard nationally on public radio, including The World. And we’re a pioneer in educational multimedia and in media access technologies for people with hearing or vision loss.

Our community ties run deep. We’re a local public broadcaster serving southern New England, with 11 public television services and three public radio services — and productions (from Greater Boston to Jazz with Eric in the Evening) that reflect the issues and cultural riches of our region. We’re a member station of PBS and an affiliate of both NPR and PRI.

In today’s fast-changing media landscape, we’re making sure you can find our content when and where you choose — on TV, radio, the Web, podcasts, vodcasts, streaming audio and video, iPhone applications, groundbreaking teaching tools, and more. Our reach and impact keep growing.

Note the order: TV first, radio second, the rest of it third. But where WGBH needs to lead in the future is with #3: that last paragraph. Look at WGBH’s annual report. It’s very TV-heavy. Compare its radio productions to those of Chicago Public Radio or WNYC. Very strong in classical music (now moving over to WCRB, at least on the air), and okay-but-not-great in other stuff.

Public TV has already become a ghetto of geezers and kids, while the audience between those extrmes is diffusing across cable TV and other media. An increasingly negligible sum of people watch over-the-air (OTA) TV. Here WGBH lost out too. It’s old signal on Channel 2 was huge, reaching more households than any other in New England. Now it’s just another UHF digital signal — like its own WGBX/44, with no special advantages. Public radio is in better shape, for now, because its band isn’t the ever-growing accordion file that cable TV has become; and because most of it still lives in a regulated protectorate at the bottom fifth of the FM band. It also helps public radio that the rest of both the FM and the AM bands suck so royally. (Only sports and political talk are holding their own. Music programming is losing to file sharing and iPods. All-news stations are yielding to iPhone programs that offer better news, weather and traffic reporting. In Boston WBZ is still a landmark news station, but it has to worry a bit with WGBH going in the same direction.)

So the timing is right. WGBH needs to start sinking new wells into the aquifer of smart, talented and original people and organizations here in the Boston area — and taking the lead in producing great new programming with what they find. I’ll put in another plug for Chris Lydon‘s Open Source, which is currently available only in podcast/Web form. And there is much more, including Cambridge-based PRX‘s enormous portfolio of goods.  (Disclosure: my work with the Berkman Center is partially funded through PRX — and those folks, like Chris, are good friends.)

In the long run what will matter are sources, listeners, and the finite amount of time the latter can devote to the former. Not old-fashioned signals.

P.S. to Dan Kennedy’s tweeted question, “Is there another city in the country where two big-time public radio stations go head-to-head on news? Can’t think of one.” Here are a few (though I’d broaden the answer beyond “news,” since WBUR isn’t just that):

All with qualifications, of course. In some cases you can add in Pacifica (which, even though my hero Larry Josephson once called it a “foghorn for political correctness,” qualifies as competition). Still, my point is that there is room for more than one mostly-talk (or news) public radio station in most well-populated regions. Even in Boston, where WBUR has been king of the hill for many years. Hey, other things being equal (and they never are), the biggest signal still tends to win. And in Boston, WGBH has a bigger signal than WBUR: almost 100,000 watts vs. 12,000 watts. WBUR radiates from a higher elevaiton, but its signal is directional. On AM that means it’s stronger than the listed power in some directions and weaker in others; but on FM it means no more than the listed power in some directions and weaker in others. See the FCC’s relative field polar plot to see how WBUR’s signal is dented in every direction other than a stretch from just west of North to Southeast. In other words, toward all but about a third of its coverage area. To sum up, WGBH has a much punchier signal. I’m sure the GBH people also have this in mind when they think about how they’ll compete with BUR.

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The kid goes to bed every night lately while treating himself to a classical piece on his bedroom stereo. Tonight, our last (a bonus, thanks to a plane that didn’t fly) in Santa Barbara before returning to Boston tomorrow, he played one of his favorites: The Planets, by Gustav Holst. Noting that Holst only set music to seven of the planets…

  1. Mars, the Bringer of War
  2. Venus, the Bringer of Peace
  3. Mercury, the Winged Messenger
  4. Jupiter, the Bringer of Jollity
  5. Saturn, the Bringer of Old Age
  6. Uranus, the Magician
  7. Neptune, the Mystic

… he wondered what ours might be called. “Earth, the Bringer of __ ?”

“Lunch,” I suggested.

A debate followed, at the end of which we agreed that 8. Earth, the Bringer of Lunch was clearly the winner.

A bit of levity. Now sleep. Then another school year back in Cambridge. See ya there.

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Jan Lewis gave me my first solo work in Silicon Valley: writing stuff for her monthly newsletter. This was in the fall of 1985. Jan was an industry analyst at the time, with a solo practice. I met her at Comdex, where she was offering free foot massages to weary conventioneers in a suite on the top floor of the space-themed Landmark Hotel, which has since been replaced by a parking lot.

Jan was sharp and funny and appreciative of good writing, which was about all I had to offer back then. I helped her on the side while I prospected for my North Carolina based advertising agency, which was brand new in the Valley and looking for action.

We got plenty of action not long after that, and Jan moved on to other things, including her original passion, which was music. She was a vocalist and poly-instrumentalist with a number of bands. It was Jan who turned me on to KFAT, KHIP and KPIG, which were (and are) serial incarnations of the same crew, and the same mutant approach to music that one jock at KPIG called “mutant cowboy rock & roll.”

Anyway, Jan has a fun YouTube video up. It’s called Mamas Don’t Let Your Babies Grow Up To Be Bankers. Fun stuff. (And love the hat.)

Bonus Link: Jan with the Remington Riders, performing I’m a YouTube Junkie. Dig it. In fact, dig all the Remington Riders’ pieces on YouTube.

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Thesis #74 of The Cluetrain Manifesto says, “We are immune to advertising. Just forget it.” We wrote that in 1999, when everybody thought that advertising was going to be THE model for businesses on the Internet. The crash came less than a year later.

Then the next bubble came, and this time everybody thought (surprise!) that advertising was going to be THE model for businesses on the Internet. This time they were right, because Google made it so. In fact, Google makes billions with advertising, not just for itself, but for millions of other sites, including countless blogs. Google does it by making advertising accountable, and by moving the wasteful side of guesswork. They take it off ink, paper, airwaves and billboards, and shift it to server cycles, pixels, rods and cones.

Still, most advertising is still wasted. The difference now is that advertising is accountable while it wastes less costly things. This is fine as far as it goes, which is pretty far, even in the current crash.

But advertising is still a bubble, and has been since it was invented more than a century ago. I’ve been saying this for many years, including last month right here.

In fact, last May I reported how Mike Arrington of TechCrunch was “outraged” by my suggestion that advertising was a bubble (or something to that effect… it’s in this podcast somewhere… maybe one of ya’ll can hunt down the quote). [Later... Dave Wallace found a clip.]

Now comes Why Advertising Is Failing On The Internet, by Eric Clemons, Professor of Operations and Information Management at Wharton, writing in TechCrunch, no less. When I read it the thought balloon over my head said “Yess!” and “Amen, brother!” over and over. For example:

Pushing a message at a potential customer when it has not been requested and when the consumer is in the midst of something else on the net, will fail as a major revenue source for most internet sites.  This is particularly true when the consumer knows that the sponsor of the ad has paid to have this information, which was verified by no one, thrust at him.

Exactly what we said in Cluetrain, and what most people say when they look for havens from advertising, which they find with TiVo and many ad-free places on the Web.

Clemons follows that with this:

The net will find monetization models and these will be different from the advertising models used by mass media, just as the models used by mass media were different from the monetization models of theater and sporting events before them.  Indeed, there has to be some way to create websites that do other than provide free access to content, some of it proprietary, some of it licensed, and some of it stolen, and funded by advertising.

At ProjectVRM we have been working on one, called PayChoice. [Later... changed to EmanciPay.]  Since most of you don’t follow links, I’ll drop the first two sections in right here:

Overview

PayChoice is a new business model for media: one by which readers, listeners and viewers can quickly and easily pay for the goods they use — on their own terms, and not just those of suppliers’ arcane systems.

The idea is to build a new marketplace for media — one where supply and demand can relate, converse and transact business on mutually beneficial terms, rather than only on terms provided by thousands of different silo’d systems, each serving to hold the customer captive.

PayChoice is a breed of VRM, or Vendor Relationship Management. VRM is the reciprocal of CRM or Customer Relationship Management. VRM provides customers with tools for engaging with vendors in ways that work for both parties. PayChoice is one of those tools. Or a set of them.

Background

We now live in a media environment where goods previously sold directly or paid for by advertising are freely available and shared widely over the Internet. A number of factors contribute to a business and social conundrum for suppliers of those goods:

  • Easy copying and sharing makes the goods freely available at growing ease and convenience.
  • Copying and sharing is so widespread and common that punishment for copyright and other usage violations touches only a small minority of offenders, and has proven to be a losing proposition.

What the marketplace requires are new business and social contracts that ease payment and stigmatize non-payment for media goods. The friction involved in voluntary payment is still high, even on the Web, where one must go through complex forms even to make simple payments. There is no common and easy way either to keep track of what media (free or otherwise) we consume (see Media Logging), to determine what it might be worth, and to pay for it easily and in standard ways — to many different suppliers. (Again, each supplier has its own system for accepting payments.)

PayChoice will create a “buy button”-simple payment system to allow readers, listeners and viewers to pay whatever they like, at their discretion, for whatever media products they use. For too many media the traditional business models — subscriptions, newsstand sales, advertising and underwriting — are not sufficient. (Especially in the current economic environment, which is akin to an earthquake that won’t stop.) Nor do they support full participation and involvement with their users.

PayChoice differs from other payment models (subscriptions, newsstand, tip jars) by allowing the customer to pay any amount they please, when they please, with minimum friction — and with full choice about what they disclose about themselves. PayChoice will also support credit for referrals, requests for service, feedback and other relationship support mechanisms, all at the control of the user. For example, PayChoice can provide quick and easy ways for listeners to pay for public radio broadcasts or podcasts, for readers to pay for otherwise “free” papers or blogs, and paid request for stories or programs to be expressed and aggregated, without requiring the customer to disclose unnecessary private information, to become a “member”. This will scaffold real relationships between buyers and sellers, and for supporting journalists covering what Jake Shapiro calls “microbeats.” It will also give deeper meaning to “membership” in non-profits. (Under the current system, “membership” means putting one’s name on a pitch list for future contributions, and not much more than that.)

PayChoice will also connect the sellers’ CRM (Customer Relationship Management) systems with customers’ VRM (Vendor Relationship Management) systems, supporting rich and participatory two-way relationships. In fact, PayChoice will by definition be a VRM system.

Micro-accounting

The idea of “micro-payments” for goods on the Net has been around for a long time, and has recently been revitalized as a potential business model for journalism by an article by Walter Isaacson in Time Magazine. What ProjectVRM suggests instead is something we don’t yet have, but very much need: micro-accounting for actual uses. These including reading, listening and watching.

Most of what we now call “content” is both free for the taking and worth more than $zero. How much more? We need to be able to say.

So, as currently planned, PayChoice would -

  1. Provide a single and easy way that consumers of “content” can become customers of it. In the current system — which isn’t one — every artist, every musical group, every public radio and TV station, has his, her or its own way of taking in contributions from those who appreciate the work. This can be arduous and time-consuming for everybody involved. What PayChoice proposes, however, is not a replacement for existing systems, but a new system that can supplement existing fund-raising systems — one that can soak up much of today’s MLOTT: Money Left On The Table.
  2. Provide ways for individuals to look back through their media usage histories, inform themselves about what they have been enjoying, and to determine how much it is worth to them. The Copyright Arbitration Royalty Panel (CARP), and later the Copyright Royalty Board (CRB), both came up with “rates and terms that would have been negotiated in the marketplace between a willing buyer and a willing seller” — language that first appeared in the 1995 Digital Performance Royalty Act (DPRA), and tweaked in 1998 by the Digital Millennium Copyright Act (DMCA), under which both the CARP and the CRB operated. The rates they came up with peaked at $.0001 per “performance” (a song or recording), per listener. PayChoice creates the “willing buyer” that the DRPA thought wouldn’t exist.
  3. Stigmatize non-payment for worthwhile media goods. This is where “social” will finally come to be something more than yet another tech buzzmodifier.

All these require micro-accounting, not micro-payments. In fact micro-accounting can inform ordinary payments that can be made in clever new ways that should satisfy everybody with an interest in seeing artists compensated fairly for their work. An individual listener, for example, can say “I want to pay 1¢ for every song I hear on the radio,” and “I’ll send SoundExchange a lump sum of all the pennies wish to pay for songs I hear over the course of a year, along with an accounting of what artists and songs I’ve listened to” — and leave dispersal of those totaled pennies up to the kind of agency that likes, and can be trusted, to do that kind of thing.

Similar systems can also be put in place for readers of newspapers, blogs and other journals.

What’s important is that the control is in the hands of the individual, and that the accounting and dispersal systems work the same way for everybody.

No, we don’t have it yet, but we do plan to put it in the Public Radio Tuner in due time. It will help that well over a million of those tuners have been downloaded so far for iPhones.

Back to Eric Clemons’ piece:

The internet is the most liberating of all mass media developed to date.  It is participatory, like swapping stories around a campfire or attending a renaissance fair.  It is not meant solely to push content, in one direction, to a captive audience, the way movies or traditional network television did.  It provides the greatest array of entertainment and information, on any subject, with any degree of formality, on demand.  And it is the best and the most trusted source of commercial product information on cost, selection, availability, and suitability, using community content, professional reviews and peer reviews.

My basic premise is that the internet is not replacing advertising but shattering it, and all the king’s horses, all the king’s men, and all the creative talent of Madison Avenue cannot put it together again.

This is exactly where we were going in Cluetrain. Back then, and still today, people tend to think of the Net as yet another one-way producer-to-consumer “medium” for “delivering messages” along with goods that “consumers” pay for. But the Net was and remains a place that serves demand at least as well as it serves supply. The demand side just hasn’t been fully equipped yet. That’s what the VRM movement (which includes but is not limited to ProjectVRM) is all about providing. When we (and others) succeed, we won’t just be consumers anymore. We’ll be customers in full standing.

Eric Clemons goes on to explain many reasons why advertising is a bubble. I agree with all of them, though I am not as pessimistic about Google, for the main reasons Jeff Jarvis visits in What Would Google Do? The fact remains that Google, more than any other large company operating on the Web, gets the fundamentals of abundance: that you make money because of it rather than with it. They know the vulnerability of advertising as a model, and I expect them to work no less hard disrupting the model than they have at building it out. (Perhaps in their secret labs they are already at work on this. I don’t know. But if they’re smart, which they are, they’re on the case.) Clemons closes with this:

The internet is about freedom, and I suspect that a truly free population will not be held captive and forced to watch ads.  We always knew that freedom comes at a price; perhaps the price of internet freedom and the failure of ads will be paying a fair price for the content and the experience and the recommendations that we value.

Among the other tools we need are pricing guns for customers. We haven’t had that since before Industry won the Industrial Revolution. But we’ll get them. PayChoice is one example of them. There will be more. And they’ll work because not paying will be increasingly stigmatized.

Right now, for example, most music is available for free. Never mind that some of us call downloading it “theft” or “piracy”. The other price is 99¢, which millions pay in iTunes and through other online stores. Those two price points are not enough. We need ones we can set on our own.

For years Congress and its regulatory arbitrators (first the Copyright Arbitration Royalty Panel and later the Copyright Royalty Board) have been saying there is no “willing buyer” to match the “willing seller” in the online radio, or streaming, business. That is, Internet radio. So, in the absence of that buyer, these panels have handed the pricing gun to the sellers (the RIAA and its collection agency, SoundExchange), but set the prices first. Last I heard, the royalty rate was set to peak at $.0019 per recording, per listener, in 2010.

If you pay 99¢ per song, you’d have to listen to it, what, 521 times to equal the same rate? If you use iTunes, check and see how many times you listen to any song.

So I’m thinking, hey, I’d be glad to pay a penny a recording for what I hear on the radio. These days you have a huge choice of radio stations on the Net. Most play music. All could carry data about that music. I’d be glad to account for that listening, and pay accordingly. And I’d like right now to set that price at a defaulted penny a song. I’d be glad to aggregate my listen-logging with others, with a pledge or an escrow account containing a sum of money for dispersal to artists at that rate. And see what happens.

In fact, that’s what I want to do with PayChoice after we work out the kinks by providing a supplementary business model for public media. Stay tuned.

Oh, and this topic will be among the many I’ll talk about at lunch tomorrow at the Berkman Center. More here.

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Until I hit SCAN on the little radio I carry with me on trips, I had forgotten how much I enjoyed KGSR/107.1 the last time I was here at SXSW. They’ve added some power since then (up from 39kw to 49kw), but their stream still plays hard-to-get. There appears to be no .mp3 stream coming from the station (so forget using it on iPhones*), and one can only listen live in the browser, with a pop-up window that doesn’t work (at least for me).

They do note that they are in “HD”, which is audible only on a few expensive radios that almost nobody has, since the radio industry decided that HD needed to be a proprietary play, coming to the world only by grace of a company called Ibiquity. I could get started, but it’s not worth it. (Go here and click on “buy a radio” and see what happens.)

Anyway, if you’re in town, give it a spin. As I said three years ago here, great radio lives.

*[Later...] Thanks to Rod K, I am now listening to KGSR on my iPhone. WunderGround Radio did cost $5.99, and it took me awhile to find where in the app’s vast directory tree the radio listings were stored, but once I got there I was very impressed. And quite surprised that one can listen to a Windows Media stream. I sit corrected on that.

I still wish KGSR also had an .mp3 stream, but it’s still good to be able to hear them in any case.

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