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Analysis

Let's see a real free market for media

Responding to uber-libertarian William Safire’s condemnation of media concentration, Arnold Kling says that big media are failing because they have too much competition. I wouldn’t disagree with that. He goes on to say that they should be allowed to fail if they can’t make it in the marketplace. He’s right. And then he says that therefore we shouldn’t stand in the way of media mergers. And he’s dead wrong about that.

Given my view of the causes of the decline of newspapers, broadcast TV, and radio, trying to save those media by preventing mergers is pointless. Big media is failing, not succeeding. As an economist, I say let it fail.

People’s use of media is changing. Newspapers are in a steady decline before they drop off the cliff of an inflection point. The networks are living on borrowed time. The recording industry is circling the wagons. And radio is in chaos.

Yet, none of these media are going away. They’re going to be savagely restructured, find new audiences, dramatically alter their value chains, and generally change into something we can’t even anticipate.

No one is trying to prevent the “failure” of existing media businesses. On the contrary, the fight against media concentration is a fight to preserve a competitive market from becoming an oligopoly of protected franchises.

I’d rather have thousands of individual media outlets desperately seeking new markets and ideas, rather than six big companies struggling to find synergy where none exists by stripping the media of assets and talent, using “convergence” as an excuse for eliminating local production, using the media they own to subsidize their other failing businesses, and generally managing our media as a dying cash cow.

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Analysis

Tragedy of the Marketing Commons: Telemarketing that mimics calls from security

I received a call from my wife’s credit card company (MBNA) yesterday while she was out. The caller wouldn’t say why he was calling because of “confidentiality”.

In the past, the only time a credit card company cites “confidentiality” is if there a problem with the account or the card may be stolen, so I gave her the message. Once she called them back, she discovered that they wanted to sell her a loan.

Not only is MBNA decreasing the likelihood that their customers will respond to legitimate calls about security and account problems, they’re projecting that same problem onto the rest of the industry.

This is an extraordinarily deceptive and self-destructive practice.

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Research

More pressure on the broadband access duopolies

The AeA (what you probably know as the American Electronics Association) says that broadband growth is slowing:

“Now, the limiting factor [to the growth of broadband] is access and price,” said William T. Archey, president of AeA, which was formerly known as the American Electronics Association. Only half of people living in rural areas have access to high-speed Internet service, and many others don’t want to pay $50 a month for it, he said.

The pressure on the broadband access duopolies to increase access and lower prices is growing. They’re not exactly a friend of the citizen, but the AeA should provide a political counterweight to the duopolies and make it clearer to everyone that they’re holding back the economy with their current approach to broadband access. [Thanks Poynter E-media Tidbits]

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Research

Perhaps media concentation would be good for kids

I hate media concentration as much as the next guy, but this baffles me. An “advocacy” group called Children Now says that the amount of kids’ television programs in Los Angeles fell sharply when one company owned more than one of the city’s TV stations.

Put aside their misuse of the word “duopoly” to describe one company owning two TV stations in the same market. My question is whether anyone really believes that kids are better off if there are more TV shows for them to watch.

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Analysis

Raw HTML is more nourishing

Jay Small has written a great newsletter on why you should learn HTML if you don’t know it already and should create your sites using “raw” HTML instead of a WYSIWYG editor like GoLive or Dreamweaver.

I created an early version of MediaSavvy using GoLive and it just made me miserable. Not only was the code it to created too complex, but the program itself was way too hard to use.

Now that I’ve gone back to hand-coding my pages using BBEdit, I know what’s going on under the hood, my pages are smaller and lighter, and it’s actually easier to tweak them when I need to.

Now that more users and designers are using templates and style sheets, it makes even more sense to use HTML. Once you start working with style sheets, you’ll find there’s a logic and flow to working in HTML that you didn’t have when you were doing your layouts with tables.

There’s something about editing raw HTML templates that requires you to keep things simple. I think that the result is better-looking pages that are actually less complex for the reader to understand.

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Research

The largest online publishers had a great first quarter for ads

The Online Publishers Association says its members, the largest online publishers, are reporting their online ad revenue is up 40.7% in the first quarter over the first quarter of 2002. Interestingly, total revenue was up 37.6%, suggesting that non-advertising revenue sources are not keeping up as a share of total revenue.

The members of the OPA are the largest online publishers, including of About.com, Bankrate.com, Belo Interactive, CBS MarketWatch, CNET Networks, CondeNet, COXnet, Edmunds.com, ESPN.com, Forbes.com, Hearst, Internet Broadcasting Systems, Knight Ridder Digital, Meredith, MSNBC.com, New York Times Digital, Scripps Networks, Slate, SportingNews.com, Tribune Interactive, USATODAY.com, Wall Street Journal Online, weather.com and Washingtonpost.Newsweek Interactive.

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Research

Free research: Pew shows broadband users are a lot like experienced dial-up users

The number of broadband users grew 50% last year, according to the latest memo from the Pew Internet Project.

CyberAtlas is running an interesting chart based on Pew’s data that shows broadband users and experienced dial-up users are pretty similar in their online activities. Not surprisingly, they use a lot more streaming media. However, the only traditional Web activity whose use seems to be increased by broadband is reading news.

Pew predicts that the pace of broadband adoption is likely to slow as most ready buyers cannot get access.

Slowing growth rates for broadband adoption could lead to price cuts in the near future. Don’t sign any long-term contracts.

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Analysis

The barriers to micropayments may be insurmountable

I love the idea of micropayments, but they never caught on. Andrew Odlyzko’s The Case Against Micropayments summarizes the obstacles to micropayments. [PDF]

Clay Shirky also wrote an article called “The case against micropayments” about two years ago, which is what finally convinced me that micropayments are going nowhere.

If you’re fighting micropayments in your organization, these articles provide great ammunition. If you’re considering, or waiting for, micropayments, you might want to consider moving on.

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Analysis

Too many content management systems?

CMS Watch has a great editorial about the proliferation of open-source content management systems.

I’m thinking about getting an open-source CMS, and I am indeed overwhelmed by the variety of choices. My guess is that it won’t be too long before the Darwinian process of adoption and abandonment selects the fittest of the projects and narrows it down to a few choices. In the meantime, we’re going to have to spend a little extra time sorting through this mess.

However, I don’t think this chaos gives a huge advantage to commercial CMS vendors, who haven’t addressed the rampant dissatisfaction with their “solutions”.

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Analysis

Smart phones, stupid choices

Shortly after i posted by rant about the lack of simplicity and quality in cell phones, I saw that T-Mobile has decided not to release a Microsoft “powered” phone.

That’s good news. But even if this phone was bug-free, the last thing I’d want in my cell phone would be Windows. We’ve become so used to used to the complexity of Microsoft’s products and so obsessed with compatibility with Windows that we’ve forgotten what we wanted them for in the first place.