Strategies for a discontinuous future.

Consulting & advisory, research notes, in the press, about bubblegen,
next wednesdays.

Friday, January 07, 2005


Light blogging for the next few days - I'll be pretty busy.

Quick takes on stuff I've missed:

LiveJournal acq was expected, blogging will see winner-take-all dynamics across niches because of high switching costs - expect a duopoly or similar structure.

Keep up with the Long Tail discussions - they are very, very thought-provoking.

Tivo chooses the PC/net over cable - interesting, I've thought Tivo's got some great strategists behind it for a while now. Tivo's come a long way from the exposed position in a few months back - this is a nice move which buys it some more time.

Replication Wars - hype about drm/broadcast flag has been cycling up lately. Let's remember one simple fact: every 'rights protection' technology so far (audio cassette tabs, floppy disk tabs, region encoding, etc) has been arbitraged away by the market in a matter of months. So historically, drm is not something to worry about. The only real danger I think, is some kind of asinine scenario, where foundries are allowed to produce only drm-enabled chips.

billg calling free-culturites 'communists' - well, come on, let's call a spade a spade. What little economic analysis there is in the free culture world is convergent to basic Marxist thought (unsurprisingly). Now, this isn't a bad thing -in fact, redefining economics is probably the right prescription to build new business models and spark new innovation.

MS is the new AOLTW - they're planning to build walled gardens with agreements from folks like MTV. This is a bad move, but hey, what do you expect? MTV stopped innovating a long time ago, and it's a way for both to stave off total strategy decay.

Apple's new products - let's wait and see...

-- umair // 1:19 PM //


Politics of the Day - Alberto Gonzales

The ideal that is (used to be) America shines a little less brightly every day.

My parents moved from the 3rd world to America for a better life. What does that mean? Partly, a life where being jailed and tortured without a somewhat fair trial by jury doesn't happen. Those of us that have had people close to us taken away and abused by thugs in uniforms understand the importance of the rule of law. In the 3rd world, many people have had this experience. It should never happen in the name of America.

Except with fascists like Al Gonzales in the service of a self-appointed Messiah, it already is happening in America's name - just like it happens in the 3rd world. How shameful and sad - what a betrayal of everything America used to be.

-- umair // 1:10 PM //


The Future of the Music Industry

Had a great chat yesterday with a former industry luminary. It got me thinking about the future of the industry. Here are my thoughts - there are two primary effects, a demand effect, and a distribution effect:

First, in the near future, iPod and ilk will get connected, as WiFi (or substitute technologies) chipset prices drop, and get integrated into larger functionality. In fact, the iPod phone is apparently just around the corner. Connectivity is going to shape the future of demand in the music industry.

Obviously, a short term demand-side gain is beaming music directly into your iPod. Another simple one is costless replication across all your devices. Fine. But probably a more important one is ad-hoc file-sharing with people you know - or better yet, want to know. Like introducing yourself to the hottie you see on the bus every morning by beaming him/her a track you like. Music has always been an object of social consumption - connected players will transform the value equation, like connected gaming is transforming the gaming value equation.

Second, connected music players will totally reshape the future of music distribution. Record stores haven't vanished because, let's face it, shopping for music is fun - part of our utility in consuming media is sampling different goods.

When you combine connected music players with RFID, you get a whole new ecosystem of possbilities for music distribution. Ponder this for a second. RFID opens up whole new kinds of network possibilities for media goods in retail locations. The most obvious is record stores which can beam tracks directly into your iPod without a massive infrastructure investment, while you walk around different listening stations (or similar scenario).

But my money is on clubs becoming music distributors/retailers - when you go to a club, you can get the DJ set or selected tracks beamed into your player. This is a natural evolution for clubs, the most iconic of which (Tresor, Ministry) have evolved naturally into labels with dedicated shops. There are huge synergies here - we go to clubs to hear the tracks DJ's have selected - that's the value they add. But we don't get to consume them later without incurring significant additional cost (ie, tracking down the right tracks on the right CDs at the right record stores). Eliminating this additional cost creates huge gains for consumers.

Of course, the above argument holds for all kinds of digital media - from movies, to books, to art. Think of how many people treat their local Border's as a 'club' for books - a place where they can chill out and sample the latest books.

But music is where we'll see the model emerge - because iPod penetration is growing nicely, and the price (and size) of connectivity is dropping exponentially. In fact, if you think of the market power connected video devices would give a Tivo over it's cable rivals at the moment - you begin to see that this kind of paradigm is almost inevitable.

The infrastructure for this paradigm is emerging: check out Sonos and Motorola's Liquid Media.

-- umair // 1:07 PM //

Wednesday, January 05, 2005

Link of the Week

Edge's question for 2005: 'what do you believe but still can't prove?'. Alpha geeks respond.

This is like crack - I can't stop reading it. Unbelievably good stuff. (Via Mefi).

-- umair // 1:14 PM //

Monday, January 03, 2005

Long Tail Thoughts

The LT is essentially a synthesis of a great dialectic of the last ten years - the shift from mass production (and mass marketing, etc) to personalization (aka mass customization).

You can think of two distributions of features of goods in a given product market, one at either end of a spectrum. We could call this spectrum production space. But first, let's assume that each consumer in this population has totally different preferences - no two share the same preference.

The first distribution is where everyone in a product market can only buy the same good - total homogeneity. Think of Model T's in 19xx. The second is where everyone receives exactly the good that matches their preferences - total heterogeneity. Think of...uhh...sci-fi books.

The second distribution is mass customization - what we thought the econ of the 21st century would look like. The first is mass production - driven by the standard economics of industrial production techniques (economies of scale, scope, etc) - what the 19th and 20th centuries looked like.

The LT is cool because it gives a more accurate of what the future econ of the 21st century is probably really gonna look like - not true mass customization, but a significant shift towards that end of the production possibility space.

-- umair // 1:42 PM //



Apart from my obvious connections to India, my family lived in Sri Lanka for three years. Route 2 - from Colombo to the southern coast and then across to the east - is a road I have driven often and love; it's now devastated. Sri Lanka is one of my fav places on earth. Needless to say, the tsunami's left me shaken and in turmoil.

Some thoughts:

1) The coordination displayed here in the UK was impressive. I went Christmas shopping at Selfridges, and they has a barcode to scan which would register donations for the tsunami appeal. No wonder so much money (>$120m) was raised so fast.

2) This is a direct example of how coordination failures in poor countries are the poor suffer first (ie, the countries across the rim just failed last year to agree on a joint purchase of an early warning system).

-- umair // 1:34 PM //



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