but apparently not.  Time has not been my friend this Holiday season.  But I wanted to jump in real quick to wish everyone a Happy New Year and to thank everyone whose read, commented on or e-mailed me about this blog in the last year.  It means more than you could know. 

With that I'm off.  I'll be back after the 1st.

A while back someone, who will remain nameless, posted something on their FriendFeed that really got me thinking.  I don't know why it struck me like it did.  I think it just speaks to what a lot of people feel is the nature of the web and that says a lot about how we all see people we interact with in this "digital world".  Anyway, they said (very succinctly)...

God I hate jerks on the internet. Why do people expend so much energy being assholes?”

Now, I don't know what she was referring to so I'll say right off the bat that the person could have been a troll.  But the more I think on the topic of "jerks on the Internet" the more I realize that the term is thrown around way too often. 

I was brought up to believe a troll/jerk/whatever on the Internet is someone who has nothing to express except an insult.  Because everyone is a little harsher on the Internet.  So if someone actually puts a thought with their insult they're just the same as everyone else on the Internet.

I doubt the person who made this comment would stand up in an actual room of people and say "God I hate the jerks in this room" no matter how rude the people in that room were. 

Because again, we're all a little harsher on the Internet. 

But being the over-analyzing type I wanted to break down some of the reasons for this "Internet Harshness" because I think understanding the phenomenon is vital to realizing that there aren't that many actual trolls out there (which should make everyone feel a little better about the world).  With that said, here's what I came up with...

The Internet just reveals what is hidden in real life

Tons of studies have proven conclusively that we as human beings don't like it when others disagree with us.  No matter how tactfully that disagreement is expressed you're going to see signs of agitation in a person when an opinion contrary to their own is expressed. 

In other words, when someone disagrees with you the emotional side of you is thinking "this person's an idiot" you just don't express that in real life.

So all the Internet does is to take that pretense away.  It brings out a harsher side of people because we temper our behavior in real life based on the person we're speaking to.  When we can't see that person it inevitably leads us to hold back less. 

But the sentiment is the same as it is in real life it's just lacking the sugar coating

Most "trolls" are responding in kind

I've noticed this most in Political blogs where someone will go on a tirade about one candidate or another and then is surprised when they get angry responses. 

So a person will say "You'd have to be an idiot to vote for Obama" and then get attacked by a bunch of Obama supporters.  That person then turns around and calls the comments "trolling" because they were just "expressing their opinion" while the commenters were "attacking them"

The problem with that logic is that the person's "opinion" was an attack in itself which means the so called "trolls" were just defending themselves.  Just because you don't realize you're being harsh doesn't mean you aren't being harsh.

People discuss things online they wouldn't discuss in real life

The reality is that most people discussing anything on the Internet are doing so because they can't or won't discuss it in real life.  That's why you see things like politics and faith discussed on the Internet so much.  Because most wouldn't discuss those things in real life for fear of alienating the people they have to be around in real life.

But by nature that means conversations on the Internet are going to get more heated than those in real life.  Because, by definition, the topics being discussed are controversial ones.

So in the end...

The Internet is, and probably always will be, the Wild, Wild West of human discourse.  No matter how mindful you try to be you're going to hurt people's feelings with the things you say and when you can't see the expression on that person's face you're going to hurt them even worse than you normally would. 

The sooner everyone accepts that as an inevitability the happier everyone will be. 

Jeff Atwood catches an interesting connection.  He quotes a blog comment from one of the developers of 2D Boy's World of Goo.  In it the developer says their software is pirated by about 90% of users which Mr. Atwood connects to a 1976 post by Bill Gates where Gates quotes the same 90% piracy rate for Altair Basic.

The lesson being that not much has changed.  Mr. Atwood elaborates...

The crushing piracy rate is especially painful in this case because World of Goo was handcrafted by a tiny 2 man independent programming shop. Even a cursory 10 minute session is more than enough to demonstrate that this is a game built with love, not another commercial product extruded from the bowels of some faceless Activision-EA corporate game franchise sweatshop. Nor is this an exorbitantly priced bit of Adobe software that costs hundreds or thousands of dollars; it's a measly twenty bucks! Fifteen, if you count the fact that it's on sale right now via Steam. Oh, and did I mention that the developers explicitly chose to avoid any form of onerous copy protection?

The bold above was added by me.  Mr Atwood then closes his post by giving this advice...

In fact, the most effective anti-piracy software development strategy is the simplest one of all:

1. Have a great freaking product.
2. Charge a fair price for it.

Do you see the problem here?  He starts the post with a company that charges a fair price for a great product and is being pirated by 90% of it's users.  He then ends by advising companies to do exactly what didn't work for that example company.

This honestly amazes me.  I'm not sure I've ever seen a clearer example of someone so invested in their dogma that they stick to it even after spelling out exactly why it isn't true.  Maybe Mr. Atwood feels he's ok because he spelled out the problems with his advice in the post but the fact that he still believes the advice at all is downright bizarre to me.  In that way I think it's instructive.  I, like most people, tend to assume people will change their opinion when faced with logic that disproves it.  But that's not always the case.

Mr Atwood does ask people to purchase the software to "revive [his] waning belief in the essential goodness of the human spirit" but even if that works it matters very little.  What about all the companies that don't have Jeff Atwood to make a post on their behalf?

The problem I have with arguments that say "online will become dominant in everything" is that they forget that the market still determines what succeeds and that not everyone prefers to do things online. 

Take this quote from Fred Wilson...

This downturn will be marked in history as the time where many of the business models built in the industrial era finally collapsed as a result of being undermined by the information age. Its creative destruction at work. It's painful and many jobs will be lost permanently. But let's also remember that its inevitable and we can't fight it. Technology and information forces are unstoppable and they will reshape the world as we know it regardless of whether or not we want them to.

Before I even start let me be clear about one thing.  Brick and Mortar sales are shrinking, online sales are increasing and I have no doubt that trend will continue for some time.  Because there is still a certain percentage of people who are uncomfortable with financial transactions online and as that number dwindles more people will find they enjoy the online experience. 

But we don't know how many people that will be which is an important distinction.  In this case, as with anything else in life, perspective is key.

To get some perspective I'm going to present two examples.  I've picked these examples because I believe most people are aware of the online channel's existence even if they don't use it.

For the first example, lets look at book sales.  I usually like to gather my own statistics but Morris Rosenthal made it so easy I'm just going to quote his chart (check out the page quoted for more info)...

So in 2007 (the year of the figures used above) brick and mortar book stores actually outsold Amazon.  By a fairly significant margin no less.  Now you can't tell me there were many book buyers who were completely unaware of Amazon's existence in 2007.  So this is the result of people choosing brick and mortar over online.

Next lets look at another example...online banking.  Take this quote (Courtesy of Bnet)...

Research and Markets (http://www.researchandmarkets.com/reports/c38186) has announced the addition of the eMarketer report: Online Banking: Remote Channels, Remote Relationships? to their offering.

Expanded broadband penetration, familiarity with the Internet and the increasing number of younger and minority households are boosting the growth of online banking. By 2010, the number of online banking households in the US will grow to 56.2 million, or 62% of total online households in the US.

Note that they say "percentage of total online households".  In fact, according to the U.S. census bureau there will be an estimated 114 million households in the U.S. meaning that even in 2010 online banking won't have reached 50% penetration. 

Now again, online banking has been one of the most widely marketed features of all time.  It represents a huge windfall for banks because a server costing about $10,000 a year can replace three $40,000 a year workers.  So banks have marketed online banking like nothing before.

Yet there are still only about 50% of the world taking the bait.

That's my point.  There are people out there who like buying their books in a store and doing their banking in an actual bank.  The only reason Fred Wilson can believe his statement that the destruction of non-online business models is inevitable is because he's locked into the perspective that everyone is like him.  But they aren't. 

The questions of online's dominance will be answered by finding out how many people prefer that method of shopping, banking, whatever.  Not some fated inevitability. 

Oh, and btw, it's not an age thing.  Ask a group of teenage girls whether they'd like to buy their clothes at the mall or online and see what answer you get.  Heck, ask a group of middle aged women and you may very well get the same answer.  Some people like the experience of shopping and that isn't going to change.

Jessica Vascellaro of the Wall Street Journal recently published an article about un-friending on Social Networks.  The gist was that some people are finding themselves overwhelmed by all their online "friends" and are choosing to severe connections with those they haven't communicated with in a while.

This story was picked up by several sites one of which was profy.com.  They provided this quote which I think gets to the heart of the matter.

Of course the entire issue of only keeping the closest people you actually talk to depends on the approach that fits every single person and some may really have nothing better to do than tracking all the status updates from their Facebook friends, commenting on them and exchanging private emails via Facebook as well. To some people paying attention to everyone you are connected with on Facebook may not even be too difficult as only a rare user will actually have enormous number of friends but at the same time the vast majority will have at least a few dozens after graduating from school and university and spending a couple of years working with different companies.

The thing I always try to remember about social networks is that there's been a lot of them.  From Blogger to Friendster to Xanga to Livejournal to Myspace and all those in between. 

Each of these services were popular for a while and then fell out of popularity fairly quickly.  More importantly, each fell out of popularity for the exact same reason.

In each case their users eventually realized the service didn't provide what it had advertised, namely an accurate representation of their "social graph" (as Facebook officials have taken to calling it).  Once they realized that they started looking for the next new thing.  A service that could provide a perfect, accurate representation of their friends and family. 

Each new service has gotten closer and closer to that ideal and each new service has garnered more and more users because of it.  Facebook has, at this point, come the closest and that is why it's successful right now. 

But the question is this: Is Facebook that perfect representation?  I think not.

The problem is Facebook was built on a flat social graph.  You basically have "Friends" and that's about it.  There are a couple distinctions you can set but certainly not enough to represent the infinite gradient that can be present in actual relationships.  Which is the problem.  You have friends you want to know everything about, friends you just want to have a way to get in contact with, and so on.  Facebook has no way to represent all those categories.

Which is how we come full circle on this.  The idea that someone would "un-friend" people seems odd but it's really a sign of flaws in the Facebook system.  The system isn't managing people in the way it's users need so the users are taking drastic actions to make it work.  I believe this trend will eventually lead users to look elsewhere. 

Don't get me wrong, Facebook is still in a good position.  By introducing a platform they've managed to take developers' eyes off the ball.  Most developers aren't thinking about replacing Facebook they're thinking about developing for it and that's a huge advantage for the company.  But that doesn't change the fact that Facebook still has that fatal flaw at it's core and someone is eventually going to realize that and do something about it.

So in closing I do believe a social networking service will eventually stick, but it will have to be one that allows people to categorize, communicate with and keep track of their "Friends" in the ideal way.  Facebook may manage to do that in the future but if they don't I think we'll look back on this as the moment that Facebook began it's decline.

I'm staying in a household with kids and as such I got drafted into...well...lets just say an activity that needs to happen in the middle of the night in a very quite fashion (just in case there are any young kids who are addicted to tech blogs out there :) )

Anyway, now I can't get back to sleep so I'm going to try to do some blogging.  But just to put it out there I hope everyone has a great Christmas today.   

That is the only explanation I can come up with for this (from Gartner VP of Research Mike McGuire...

(and yes, I'm still on vacation.  But I'm doing the ol' "Techmeme-Skim" every morning and I couldn't resist this)

“By propping up the CD business, rather than fully investing in online distribution alternatives, the major labels and the larger music industry have neither succeeded in stamping out piracy nor done much to recreate the business models of the old ‘record business,’. Music labels should instead emphasize ‘digital first,’ making all new releases and catalog issues via digital services and moving CDs to an on-demand publishing mode.”

I have a point here but before getting to it I'd like to lay out why this suggestion is stupid. On that note I'd first like to address the fact that physical CD sales are dropping in sales.  I'm going to quote from a post I made a while back...

If you look here you'll find the actual numbers for Physical CD sales in 2006 which was 703.9 Million Albums.  Using the Ars Technica numbers above (of a 14% decline) that puts the 2007 number at about 605.3 Million Albums in the U.S (you'll hear 511 Million but that number doesn't seem to cover the deep catalog sales). 

Now, assuming 12 tracks per Physical CD that means 7,263 Million Physical Tracks were sold vs 844.2 Million Digital Tracks.  That's close to 9 times as many Physical tracks being sold.

Of course physical CD sales are going to drop now that people can buy single tracks.  Some CDs only have a few good tracks on them.  But the majority of music is still being sold through physical CDs.  Meaning the majority of money being generated for the music industry is still coming from that source.

Given that, shouldn't Gartner at least consider the possibility that people might prefer physical copies of music?  I, for one, do.  Yes I rip the music and listen to it on my iPod primarily but I like having that physical copy stored away.  More to the point, I like that it's in an attractive package.  Is that so hard to understand?

Now let's take a look at some player statistics.  Apple had sold about 151 million iPods as of March 2008 and they average about 10.5 million in sales per quarter so they've probably sold about 172 million as of right now. 

That's impressive.  There's no doubt.  But when compared to the populations of the 22 countries that the iTunes store operates in it's still fairly insignificant.  That number stands at 884 million.  So even if each iPod sold represented an iPod in operation (unlikely, I've owned 3 since it's debut) they'd still constitute less than  1/5th of the population in those countries. 

Oh, and lets remember the world population is 6.6 BILLION meaning digital music is only legally available to about 1/8th of the world. 

(That's probably a tad inaccurate in that countries like China have iTunes competitors available)

So basically Gartner is suggesting the music industry shift it's focus to target a very small percentage of their overall customer base. 

My Point: OK, here's my actual point: It's important to remember why you go to people for advice.  Gartner, as a research firm, is supposed to provide guidance by analyzing trends over a long period and extrapolating those numbers into the distant future.  That allows you as a company to make long term goals based on that guidance.

No one should listen to Gartner, or any research firm, for what to do in the next year.  This is for two reasons.  First, trending is based on averages meaning it won't necessarily tell you what is going to happen next month (but it ideally should tell you where we'll be 3 years from now).  Second, you have a better source of data and that's the previous quarter's sales.  Consumers don't keep track of business cycles so your best indicator for the next quarter's sales is almost always your last quarter's sales. 

My opinion would be different if focusing on digital music required a huge investment on the part of the music industry.  But given those distribution channels already exist the music industry can simply "play it by ear" and let nature take it's course.  If physical sales do gradually dry up they can react accordingly.

There's no reason to artificially push physical CDs to their death (and if they try and the attempt fails it could be very costly).

I tried to get some pre-written posts for Christmas week but there was just no time.  So this will be it for me until the 26th of December.  I hope everyone has a great Holiday (whatever it might be) or a nice non-holiday related week (if you don't celebrate anything)

I leave you with an early Christmas gift I got this year.  I've been a fan of Jeff Dunham since I was a kid and though I've collected every performance I could find I was never able to find the one that first introduced me to him.  Until now.

Courtesy of YouTube here's Jeff Dunham from 1992...

In the past, I’ve made an effort to show people how wrong it is to attack the RIAA because it brings about a result that is contrary to what those same people want.  On that note I’m going to use Mark Evan’s post on today’s developments to help make that point once again. 

After years of waging a legal jihad against their customers, the music industry has decided that nasty lawsuits isn’t a good tactic anymore. You have to wonder why the change of heart given the music industry seemed to take great pleasure is suing the pants off people as opposed to working on creating a kick-ass business model.

So they sue, and they’re evil.  They stop suing, they’re evil.  What they should do is create a “kick-ass” yet unfortunately completely undefined business model that will somehow make people willing to steal music agree to pay for it.  That’s what they SHOULD be doing.  Sure.

According to the Wall St. Journal, the ISP will “either forward the note to customers, or alert customers that they appear to be uploading music illegally, and ask them to stop. If the customers continue the file-sharing, they will get one or two more emails, perhaps accompanied by slower service from the provider. Finally, the ISP may cut off their access altogether.”

To be honest, it’s a brilliant approach.

After all, why do all the dirty work by yourself when you can build an army to fight the good fight. By taking this approach, the RIAA moves away from being the Evil Empire, while getting some help to achieve the same end goal.

Here’s the reality of the situation: It isn’t hard to sue someone for file trading.  Yes there will be one in a few hundred thousand people who will fight back but in the end it’s a job that a first year law student could do. 

Because the practice of law is all about figuring out which precedents apply and making the argument for those precedents.  But once a case has been researched by high end attorneys and those arguments have been used dozens of times in court you can just hand a low level lawyer a script and send him on his way.  This is especially true since most file traders can’t afford a lawyer to defend themselves and no one will take a case against the RIAA pro-bono because they know they’ll probably lose. 

Meaning the last thing the RIAA needs is an army of ISPs to help.

That said, I suspect the RIAA is desperate at this point.  Their job was to pursue the record companies’ interests while taking the heat off the actual record companies.  Thus far they’ve done neither of those things.  Everyone still blames the record companies and file trading is, at best, only slightly diminishing (and some claim it’s growing). 

So the desperation is coming from the RIAA who, after having their budget repeatedly cut, is starting to see the writing on the wall. 

But it’s important to remember something here: The RIAA is not the record companies.  If the RIAA dies it won’t end the record companies’ efforts to stop file trading.  It will only give birth to another organization tasked with the same goals.  Which makes the RIAA’s desperation a good thing because it makes them more willing to deal (which a new organization probably won’t be).   

Which brings me back to my point.  File Trading Advocates can attack the RIAA all they want but it isn’t going to accomplish anything.  What they need to do is praise every effort that moves away from harsh tactics and work with the RIAA to develop realistic solutions.  The RIAA’s current desperation means there’s no time like the present to start a dialogue. 

Venture Beat covers a recent survey conducted by Deloitte Services on "The state of media."  In it they come to some conclusions that I consider odd. 

Now let's be clear on one fact before going forward: The people presenting this survey are claiming it represents the population at large.  With that clarification in place I'm going to take the millennials section paragraph by paragraph to try to make my point.

Some of this comes as no surprise, as younger people tend to be early adopters. The millennials embrace gaming, music, the Internet, and user-generated content. They’re less likely to read newspapers, watch TV, read formal news sites, or visit traditional shopping and product review sites. Their preferred way of absorbing content is watching video on the web and handheld devices or listening to music on mobile phones and MP3 music players.

This is probably the least offensive of the paragraphs in that I can't definitively disprove these claims.  But let's take the phrase "Their preferred way of absorbing content is watching video on the web" and examine it for a second.  Just from a common sense perspective does anyone really believe this?  Do you honestly believe a person given the choice between an HDTV with surround sound or streaming video will pick the streaming video?  Doesn't seem likely. 

On the other claims they could be true.  But ask yourself this: aren't they a little vague?  What is a traditional news site or a traditional shopping site?  Couldn't it mean different things to different people?  More importantly, don't teenagers (the majority of this demographic) tend to reject anything with the word "traditional" attached to it?  Wouldn't they be more likely to answer "no" when asked if they visit traditional news sites?

Moving on...

The surprising thing about millennials is that they do read magazines, as do most of the other generations surveyed. Even when given the choice between a magazine’s web site and the paper magazine, respondents preferred the paper versions.

This is where we really start to see this bias.  To be surprised by this is ridiculous.  It's a proven fact that computer screens are harder on a person's eyes than paper.  So to claim it's surprising that people of any age group would pick printed media for in-depth reading shows a judgement clouding bias.

The social messaging service Twitter has also become an extremely important form of communication, Moran said. Twitter, which wasn’t even on the radar in last year’s survey, is a prime example of how Millennial consumers can popularize a brand new technology, in contrast to past years when enterprises were the first to adopt things.

Ah Twitter, I was waiting for it to be mentioned.  Now the claim here is that Millennials have "popularized" Twitter and that it is now an "extremely important form of communication" for this group.  But according to Compete.com Twitter only has about 3.4 million unique visitors per month (of any age).  That's worldwide.

Now compare that to the U.S. Census Bureau which states there are 51.2 million Millenials in the U.S. alone.  So how important can it be?  Which brings me to both my final quote and my point.

“Something like Twitter is anathema to corporations that worry about security and the lack of control over the technology,” Moran said. “It’s a perfect example of how power has shifted to users.”

Now first, this isn't about Twitter.  It's about debunking yet another survey that was taken with a huge bias and then used as support for that bias. 

On that note I have two points...

1.  You have to use common sense when looking at surveys like this.  Again, it isn't that this could be debunked it's that it was painfully easy to debunk. It defies basic common sense.

2.  I'm not trying to be "anti-new media" here.  I want new media to grow.  But doing that requires having a realistic view of where it stands right now and bogus surveys that make it look more popular than it is don't help with that.

In the end, my hope with this post is that people will realize how harmful this type of information is and will start demanding more accuracy from companies that take these surveys.  Only then will we know the truth about how popular new media is and only in knowing the truth will we be able to increase that popularity.