--------------- EDITOR'S NOTE ---------------

Welcome to this week's Weekly Update from C3. This week's newsletter features pieces by C3 graduate student media analyst Geoffrey Long, who discusses Microsoft and the infrastructure at Redmond, the Chinese privatization of the roads, and the development of new forms of infrastructure. In this week's closing note, Grant McCracken analyzes the need for branding campaigns to rescue companies from being treated as nothing more than a commodity, using HP's recent campaign as an example of what NOT to do.We also include our weekly update of what has appeared on the Convergence Culture Consortium Weblog.If you have any questions or comments, direct them to Sam Ford, Editor of the Weekly Update, atsamford@mit.edu.

--------------- OPENING NOTE ---------------

Redmond 2.0, Microsoft 3.0, iRoads and China.

By: Geoffrey Long

The New York Times ran an interesting story yesterday about the growing pains at The House Bill Built: Microsoft Is Looking for More Elbow Room. Some particularly noteworthy excerpts:

Microsoft — in the midst of a bitter rivalry with Google and Yahoo — snapped into action this April, saying the company would spend about $2 billion on new technologies to reinvigorate itself. Then last month, Microsoft's chairman and co-founder, Bill Gates, announced that he would leave his day-to-day role at the company in two years.

Easier said than done, at least when you consider that the company, which houses more than 30,000 people on its sprawling campus in Redmond, Wash., suddenly will have to make room for up to 12,000 new bodies. It will spend $1 billion to expand that campus by more than a third, or 3.1 million square feet, over the next three years. That includes new leases and the purchase and construction of 14 buildings. For a modest-size real estate market like Seattle, those are staggering numbers.

"The Redmond you'll see even in a year will make your eyes pop," said Lou Gellos, a Microsoft spokesman. "It's going to be a very different campus."

And, from a bit later in the piece:

Transportation has become the largest issue for the growing region. And, for its part, Microsoft has vowed to spend $35 million on transportation improvements in Redmond, including an overpass over Route 520 near its campus, sewer upgrades and turn lanes on nearby roads.

But even a sizable cash infusion would merely be a temporary solution to a problem that has been steadily worsening for years. The area's roads and bridges, some of which are earthquake hazards, already struggle to handle the company's 30,000 employees. The Route 520 bridge, which crosses Lake Washington and connects Seattle to Redmond, was built in 1963 to handle 15,000 vehicles a day. Now, 115,000 vehicles cross it daily. Increased traffic, windstorms, earthquakes and boating and traffic accidents have further shortened the bridge's life and required extensive repairs. State officials worry a strong windstorm or earthquake could damage the bridge beyond repair.

"The economic impacts would be catastrophic," said John Milton, SR-520 project director with Washington's state transportation department. "It's the feeder for two of the major employment centers in the area."

Privately, Microsoft officials bristle at the notion that the transportation burden is theirs. But Microsoft's size makes it a convenient target for complaint among Redmond residents.

I visited Redmond back in the late 90s, and I remember being floored by how cramped for space Redmond had become even back then. Now, as Microsoft moves into what might be seen as its Third Phase (phase one: Windows; phase two: the Internet; phase three: profit a Google-esque Web OS) this new growth stage could be really damaging to the environment – or, it could be amazing.

On the Road to China:Trading Chinese Private Roads and Developing iRoads

This idea is driven home by something I've been meaning to write about for the last couple of days – my 4th of July weekend was spent in preparation for my trip next week to China.

From July 9th-19th, I'm going to be on a whirlwind trip to China, touring Shanghai, Beijing and maybe to Hong Kong. It's a research trip through CMS; I myself am going to be looking at design and implementation of mobile media, and some of the others on the trip are looking at social networks, fashion, art, and so on.

I've been reading up on modern China in preparation for my trip, and my mind has been truly and thoroughly blown by all my research. For starters, I've been enjoying China, Inc.: How the Rise of the Next Superpower Challenges America and the World by Ted C. Fishman. Fishman outlines how the last 20-50 years have shaped China into the new "Compatilist" (Communism + Capitalism) force that has the rest of the world scrambling. He talks about the transformation of Chairman Mao into a sort of Colonel Sanders-esque pop icon, he talks about China's explosion of infrastructure and architecture in a tornado of high-speed construction, he talks about how the rural Chinese population is streaming into the cities in droves... It's really fascinating stuff, highly accessible and conceptually exhilirating. The passage that springs to mind when dealing with Microsoft and Redmond, though, is how much of China's new infrastructure is, ironically enough, highly privatized – the roads are a lot like public companies being traded on a stock market. Companies are formed to build, maintain and operate the toll roads, which then pay a certain percentage back to the state for the use of the land. The rest of the profits, from what I understand, continue to belong to the companies and their shareholders – many of which are foreign investors. Imagine having part of your retirement package literally tied up in Chinese roads. It's happening.

This made me wonder about the feasibility of a similar scheme here in the States, only smushing it together with the notion of the digitally navigating vehicle. The NYT piece talks about how twice a day the Microsoft traffic transforms the Redmond streets into a giant parking lot. What if Microsoft could use the new infrastructure they're building as a test for these digitally navigating vehicles? It's a technology that's been building for a while; imagine a Mini, an Escape, or, better yet, a Smart car outfitted with a superpowered mapping system that could interface with a guidance system built into the road, so that when the driver turned off the main highway and onto a "smart road" (or iRoad, if it were built by Apple instead) the car went into autopilot. Distance sensors on the vehicle could tell it (and the road) how much space existed between the vehicle and the objects around it, motion sensors along the smart road could stop traffic when a deer or a dog does a runner across traffic, and wi-fi or cellular EVDO transmitters along the iRoad could turn the entire corridor into one long virtual extension of the campus. How cool would it be if the last 30-60 minutes of your commute could be spent with checking your email and voicemail while your "virtual chaffeur" handled the driving? You could arrive at work with an empty inbox, ready to tackle whatever is physically waiting for you in your office.

This is the type of technology that cash-flush megacorporations like Microsoft and Google should be building; as Fishman notes in his book, once information technology renders the entire world a valid location for doing business, it's simple stuff like infrastructure that makes one part of the world more attractive for knowledge workers than others. (Well, that and the things Richard Florida outlines in his Creative Class concept – and holy crap, how come nobody told me Florida has a new book? The Flight of the Creative Class: The New Global Competition for Talent sounds like it's right up my alley...) Once they have the technology down, they can charge tolls (or more likely, a monthly usage fee a la Speedpass) and then turn right around and license that technology to developing countries like China.

All iRoads Lead to iRome the Global Village

At the end of the day, when Chinese factory workers will work for pennies on the dollar, it's not enough for Americans to whine and complain and scream about tariffs. No, I think we have to innovate our way through the solution – we have to invent, perfect and monetize new ideas for the rest of the world. If a globalized commercial ecosystem is to take effect (which it certainly seems like it will), everybody needs to figure out what they do well – and I think we Americans need to play up our innovation and imagination and play down our isolationist tendencies. Americans don't like taxes – who does? – so let's let the state step out of the way of building infrastructure and let the big companies take a crack at it in the best, most innovative way they know how. Hell, while they're at it they can figure out a way to pave those roads with super-industrial photovoltaic cells and use them as giant solar collectors during off-peak hours.Imagine if the entire US highway system was made out of these smart roads: a cross-country road trip without driver fatigue, a massive drop in the number of exhaustion-related accidents, more quality time with your fellow travelers, and shorter trips (for those of us who can sleep in car seats) if you let the autopilot drive all night.

This is the kind of thing that America does well. We've always been a nation of dreamers and engineers. If we're going to continue to lead the world in the 21st century, that's the banner that we should be waving as we go. We'll never have a monopoly on innovation – nor should we – but as the world outsources its manufacturing to countries with lower costs of living and a fierce need for employment, America should strive to become a go-to place for countries who want to outsource their blue-sky thinking. I can see the billboard whizzing by on the side of the iRoad now: "America: Inventing The World Since 1776."

Okay, so the tagline needs work, but it's a start – iRome wasn't built in a day.

Geoffrey Long is a graduate student in the Comparative Media Studies Department at MIT and a media analyst with C3. He has worked extensively in web production, graphic design, and various forms of storytelling, including audio pieces available through iTunes and his work as editor-in-chief of an occasional journal of literature.

----------- NEWS FROM THE C3 BLOG -----------

Storytelling Album in Simon's Songs from the Capeman. Paul Simon's Broadway hit may have been a failure, but the album from it remains a legacy at how an album as a whole can work as a compelling storytelling device if used correctly.

http://www.convergenceculture.org/weblog/2006/07/songs_from_the_capeman.html

Nobody's WatchingDeveloping Strong Following. The rejected WB sitcom Nobody's Watchinghas a lot of people watching now--on YouTube. Unlike Global Frequency, will this flurry of online content cause one of the networks to bite?

http://www.convergenceculture.org/weblog/2006/07/nobodys_watching_i_beg_to_diff.html

India Becoming Major Player in Online Gaming. Stefan Werning looks at India's becoming a major competitor for China in the online gaming realm.

http://www.convergenceculture.org/weblog/2006/07/india_competing_with_china_in.html

News of Soap Actor's Death Spread Through Fan Community. Thedeath of Benjamin Hendrickson was not immediately picked up by most mainstream media, so the details on what happened were reported through the online community on various message boards.

http://www.convergenceculture.org/weblog/2006/07/soap_world_shocked_by_actors_d.html

KFC's Colonel Gets a Face Lift. Col. Sanders is being transformed further away from the actual Harland Sanders into a new character that emphasizes the myth of Sanders.

http://www.convergenceculture.org/weblog/2006/07/sam_bond_on_colonel_sanders.html

Soup of the Day. A new, online-only television show is generating a lot of attention, a situation comedy based on one man trying to maintain relationships with three women simultaneously.

http://www.convergenceculture.org/weblog/2006/07/soup_of_the_day.html

Review of Article on Survivorand the Development of Ritual and Tradition. An article in the latest Journal of American Culturedelves into the ways in which Survivorhas created its own mythical universe and how that world has since been transformed into a commodity.

http://www.convergenceculture.org/weblog/2006/07/welcome_to_the_jungle_of_the_r.html

The Plight of Weekly Newspapers. Sam Ford writes about the depleted economic state of many weekly newspapers for small communities and possible ways that the Internet may be the savior of these news sources.

http://www.convergenceculture.org/weblog/2006/07/the_plight_of_weekly_newspaper.html

Major Moves to Online Content. CBS creates deals for affiliates to have financial incentive to drive Internet traffic; MTV Networks adds a substantial number of programs to its iTunes list; Google ramps up its online video service; the battle over "net neutrality" continues.

http://www.convergenceculture.org/weblog/2006/07/major_moves_to_online_contentb.html

The State of High Speed Internet. Sam Ford reminds those who think the wireless revolution is imminent that there are plenty of more rural areas where even the affluent have few high-speed Internet options.

http://www.convergenceculture.org/weblog/2006/07/the_state_of_highspeed_interne.html

Henry Jenkins on Web Comics and Network Culture. C3's director discusses networking and the the culture of "social production" through an exploration Web comics.

http://www.convergenceculture.org/weblog/2006/07/web_comics_and_network_culture_1.html

Transmedia Novel Makes Wrestling Characters Crime Stoppers. WWE's Big Apple Takedownis a novel using wrestling characters but outside the fictional universe of the WWE wrestling shows.

http://www.convergenceculture.org/weblog/2006/07/wwes_big_apple_takedown.html

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--------------- CLOSING NOTE ---------------

How Not to Save Brands (from the Commodity Basement)

By: Grant McCracken

Personal computer brands fell from their original glory with Icarian speed and suddenness. Thanks to Michael Dell and the off-shore players, the market went from huge premiums to tiny margins in what seemed like a single precipitous descent.

The "commodity basement," this is where brands subsist on life support. Ventilators, tubes, shunts and pumps, the marketer will now resort to any artifice to keep the thing alive. When brands are obliged to compete on price alone, there are no margins for real acts of meaning manufacture. The brand clings to life. (And eventually even this is too much to hope for. We learned today that Ralph Lauren is discontinuing the Polo line of jeans. In its day, Polo was a brand to be reckoned with. Then it was remaindered to the commodity basement.)

The solution is obvious. Fight the price game! Escape the community basement! Identify a higher value that consumer cares about, and deliver this value with product and brand development.

This appears to be precisely what HP is up to with it's new campaign from Goodby, Silverstein & Partners. Here is the copy from an ad which appears on the back cover of a recent BusinessWeek.

In the beginning, it was magic.

Magazines proclaimed a "personal computer revolution." And it was, for awhile.

But soon the word "revolution" got dropped from "personal computer revolution." "Personal" vanished from "personal computer." And both words disappeared into "PC."

PC. A boring box, sold on speeds and feeds and gigabytes.

Still, there is hardly anything you own that is more personal.

Your personal computer is your backup brain. It's your life and the life of your business. It's your astonishing strategy, staggering proposal, dazzling calculation. It's your autobiography, written in thousands of daily words.

Today HP is making the entire experience of owning a computer more personal than ever before. We are designing products that offer you ever greater power, simplicity, and security; all backed by a one-year limited warranty, the industry's best. And we offer HP Total Care--expert services for every stage of your computer's life, to help you configure it, protect it, tune it up, even recycle it.

Because when you own a personal computer from HP, you own something more that right to demand that the personal computer will finally live up to its name.

Very good. The research, we guess, was illuminating. PCs do create extraordinary value in the life of the consumer. Many of us would put ourselves in harm's way to protect our computing devices. My little ThinkPad is my little think pad. I would be pretty completely thoughtless without it.

The agency or HP discovered the higher value of the PC. The HP website puts it this way:

This new HP campaign focuses on the highly individual and personal relationship people have with their computers, unique to each user. Whether what they are creating is a spreadsheet or a work of art, HP's goal is to make the personal computer a more powerful personal tool.

But here's the problem. HP does not appear to have stepped up. The new campaign does not herald hardware or software that actually makes the personal computer "a more powerful personal tool." Most of the fuss appears to be about a program called Total Care which gives better backup and repair.

Really. That's it? What happened to "Your personal computer is your backup brain...your astonishing strategy, staggering proposal, dazzling calculation, your autobiography"? Until this brand promise is built into the HP PC, the ad is really just talk. Indeed, it is the abuse for which advertising is famously infamous: dressing mutton up as lamb. More exactly (mixed metaphor, me?), where's the beef?

The options here are not hard to imagine. With the deep intellectual gifts at its disposal, HP could easily have offered hardware and software options that really do deliver against the proposition. How about software of the kind that MindJet creates? The "mind map" software really does make it easier to think. There are visualization technologies out there of several kinds that could be developed (or purchased) that would give HP machines a real claim to being "personal, powerful tools". All of us live in a wind storm of information. All of us use our personal computers to manage this chaos. How about a little help here?

It sounds like I am making the criticism that Bob Garfield brought against the BMW "ideas" campaign. Today, in Advertising Age, he insisted that the BMW campaign (from GSD&M) was cliched and without substance. There is, he says, no evidence in this campaign that BMW is in fact a corporation committed to innovation. I think he has missed the point here badly. In fact, something extraordinary is happening in the corporate world. It is growing ever more responsive in order to track the growing dynamism of the competitive world. This puts the nay sayers and the truly creative players at odds with one another. I think making itself the champion of creativity and dynamism is a strategic move for BMW. (Mr. Garfield says the campaign is a cliche from a 1950s Tony Randall movie. Can he really have missed that this world has changed beyond recognition?)

No, I am not insisting, as Clay Christensen does, that all branding has to be about a functional benefit, a utilitarian property. Sometimes the concept of the brand is the value of the brand, a value, in point of fact, that commandeers very nice premiums indeed. But in the case of the HP campaign we need something more than a general acknowledgement of the value of a PC. Because, very plainly, every single PC delivers this value, and a Total Care package is neither unique nor part of the real value add here.

We have seen Nokia claim for the brand some of the higher value delivered by the category. (See the post noted below.) There is no change in the Nokia bundle of utilities in evidence there. But the claim is made by an act of meaning manufacture of some subtlety and a good deal of depth. Nokia is made a brand that gets how the consumer uses technology and a match is fashioned between the most substantial benefits of the technology and the Nokia brand. The HP ad, on the other hand, tends to read like a lecture in how lucky we are to be using personal computers. I get that. I think we all get that. The question is, what has HP done to earn any of the credit.

With off shore suppliers, and lightening acts of reverse engineering, increasingly the best way to fight demotion to the commodity basement will be brilliant acts of branding. We may take the HP campaign as an object lesson, a demonstration of how not to do it.

References

Garfield, Bob. 2006. BMW's New "Big Idea" ads aren't" www.hp.com/personalhy first TV ads from GSD&M are terrible. Advertising Age. June 6, 2006. here. (subscription required)

McCracken, Grant. 2006. The Problem of Partial Ethnography. This blog sits at the... May 3, 2006. here.

McCracken, Grant. 2006. BMW claims meaning for the brand. The blog sits at the... May 15, 2006. here.

For the HP ad in question, see the back cover of BusinessWeek. May 22, 2006.

For more on the HP campaign, see comments on the HP website here.

For still more on the campaign, see the PR fact sheet on the HP website here.

Grant McCracken is a faculty adviser for C3 and the author of various books on brand management and cultural consumption. He holds a Ph.D. in cultural anthropology from the University of Chicago and has been a senior lecturer at the Harvard Business School, in addition to director of the Institute of Contemporary Culture at the Royal Ontario Museum. He is also currently an adjunct professor at McGill University and a corporate consultant on brand management.

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Compiled and Edited by Sam Ford (samford@mit.edu)

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