January 19, 2007
MIT C3 WEEKLY UPDATE
Weekend of January 19, 2007
*Opening Note: Grant McCracken on a Stock Market for Music
*Glancing at the C3 Blog
*Closing Note: Huma Yusuf on Pakistani Uses of Orkut and Facebook
--------------- EDITOR'S NOTE ---------------
Welcome to this week's Weekly Update from C3. As usual, this week's update includes links to all the entries published during the week on the Convergence Culture Consortium Weblog. Also, the site now features tools to favorite the blog on Technorati, so be sure to do so if you read on a regular basis.
This week's update features an opening note from C3 Affiliated Faculty Grant McCracken, who writes about a stock market for music, while C3 researcher Huma Yusuf provides a closing note about Pakistani uses of social networking sites like Orkut and Facebook.
If you have any questions or comments or would like to request prior issues of the update, direct them to Sam Ford, Editor of the Weekly Update, at email@example.com.
--------------- OPENING NOTE ---------------
A Stock Market for Music
By: Grant McCracken
It is 2010. You're in San Diego, visiting a friend. He takes you to a hip little eatery. The neighborhood is filled with auto repair yards and unbranded coffee...but not for long. The condos are coming.
There's a guy in his 50s sitting at the table in the corner. He is dressed casually, contrarily, anti-conventionally, but there is no concealing the fact that he's got money. (Why is it that wealth always shows through, shines through? You'd think money would buy advice, wardrobe, camouflage, concealment, but, no. You can always tell.)
Your first guess is that the guy is a trust fund baby. But there's no hint of self reproach, so that can't be it. Hmm. Well, maybe he made his fortune in a conventional way, patio furniture, say, and then went bourgeois bohemian. No, the small signal of wealth aside, this guy is vastly more bohemian than bourgeois. This is no interloper. This guy fits in.
When there is a lull in the conversation, you ask your friend. He looks over, and says,
Oh, that's Tom. He invested in Sarah McLachlan early. Made a bundle. Ran it up. Good choices. Worth a fortune.
This spring, President Bush signed into law a tax code change that will make it easier to sell intellectual property as stock. One of the people to seize this opportunity is Terry McBride, CEO of Nettwerk Music Group.
Once we have access to [the full range of] intellectual property, we're going to offer shares in individual artists and take in equity investments. Eventually, a major band could be its own public company. (from Howe, below)
A stock market for music. McBride's model says that "even a band selling 100,000 units a year becomes profitable."
Is this what the future looks like? Is this where music and popular culture heading? We know that the existing business model is busted on two sides.
First, there is the problem of plenitude. The producers of music are now apparently infinite. The tastes of the consumer are fragmenting spectacularly. The technologies for distribution are changing at light speed. The old model looked like a Mississippi delta with all the music running back up stream, from the few to the many in the hinterland. This is over. The new world of music looks a lot more like a telephone exchange of the 1940s, with the remaining studios now obliged to play harried operator (bright lipstick, hair net, smoking theatrically) desperately taking calls and stabbing at a match. Plug and play, feverishly.
Second, digital rights management continues to put the industry at risk. Sunday, the New York Times leveled its guns at DRM (Randall Stross, below). I was thinking that the problem with DRM is not that it protects the property of the music makers, but that it insults the consumer with barriers and inconvenience. And as I was thinking this, I just happened to be struggling to open a new CD and the hinge on the jewel case snapped off, as it often does. Insulting the consumer, let's just call it a music industry specialty.
So the existing model is at risk. And this is precisely why the Nettwerk model, let's call it, has a chance. (Actually, there are several experiments in the area, including Dimensional Associates, Ingenious Media and even Warner Brothers' Cordless.) The world of culture has always had minority plays that succeeded at the margin without ever putting the mainstream at risk. But McBride's innovation could work. This could be the future.
But how would I know? Asking an anthropologist whether a market can work is like asking a TV weather man to describe the science of a cyclone. "Well, I know the wind goes really fast. In a circle." [Spin finger in tight spiral to "demonstrate."] No, this is a job for Pip and Dave at Coburn Ventures. (And I hope they have a go.)
An anthropologist can comment on the cultural implications. The interface between musician and industry is not very mediated. The talent spotter, the A&R guy, might be a real fan of the music, but every successive link to the studio runs abruptly away from the music. It's not mediation, really. It's more like a series of damage control chambers, designed to keep the artist out and the money in. (And we thought it was fans committing the piracy.)
But what about Tom? What if there were a Tom on the scene? Now, the creative recruitment and the capital decision are being made by the same person. And Tom doesn't need to make a fortune, so he doesn't need to find the next bright light, the next Beyonce, say. He just has to make his numbers, and these can be as small as 100,000 units. Even these numbers can make Tom a very rich man. He doesn't have to make a fortune to make his fortune.
Tom doesn't have to communicate his decision up the ladder so he is freed of miscommunication or committee cowardice. He is not obliged to use a shot gun strategy, funding many artists to find the one who can pay for all the failures. He can risk more because he is risking less.
Tom's world scales beautifully. If his choices are bad for the year or even the decade, he lives more simply. He doesn't have a payroll, to speak of, or fixed costs. Well, he can always sell the place in Panama. Best of all, he doesn't have to force the issue. He doesn't have to manipulate taste or hand out payola. He just has to read taste well.
I think fans will like Tom as much as they now dislike Warner Brothers. The latter always took a big because it was going to keep a big chunk. Tom has a smaller foot print. In a sense, he is merely charging less to do what the studio does: spotting talent and funding it. (And that may be what the consumer is now telling the studio when they help themselves to intellectual property: it shouldn't have to cost that much.)
Tom helps to solve the plenitude problem even as he helps exacerbate it. He is prepared to take risks that the studio can't afford, because he trusts his taste in a way a studio never can. And I believe that when he begins to make money, he will have to pour some of this back into the creative community (art, film, not just music) because he will need to augment the social capital that allows him to book talent in the first place. (In anthropology, this is called the "big man" model of reciprocity.) What he cannot do is the studio thing: take the money and run.
With many Toms in place, capitalism can no longer bend the world back into the mainstream. Recently, capitalism has made a habit of making money for the center by selling culture from the margin. Profits are used to fund the corporation, and the downtown towers, private jets, and stadium boxes thereof. Profits are used to fund senior manager's pay packages and the gated suburbs that rise from them. Thus does capitalism sell one, alternative, culture to fund another, middle class, culture. Thus does capitalism take out profit and difference. Tom's capitalism will fund difference. (I don't believe this will ever be "long tail difference," but it will be much less chunky than it is now.)
So where will Tom come from? Some Toms will be naturally occurring and self invented. And this is as it should be. But some Toms will have to be brought along, in the same way, for the same reason, that any creative talent must be brought along. Someone will have to play selector and banker to Tom so that he can play selector and banker to artists.
And so who is that? It won't be the conventional b-schools. It won't be HBS. And it won't be the big corporation as professional training ground. It's won't be UBS or UPS. It's going to have to be a new kind of b-school, or perhaps one of those new fangled d-schools. What we need is a school that creates graduates who create businesses that create cultures. No gentrification required.
Howe, Jeff. 2006. No Suit Required: Terry McBride has a maverick approach to music management: Take care of the fans and the bands, and the business will take care of itself. Wired. September (Issue 14.09). here.
McCracken, Grant. 2006. Flock and Flow. Bloomington: Indiana University Press.
Stross, Randall. Want an iPhone? Beware the iHandcuffs. New York Times. January 14, 2007. 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.
---------- NEWS FROM THE C3 BLOG -----------
The Power of Reality Television to Inspire Political Debate in the Blogosphere, Commented on by...A Blogger from The Apprentice. Apprentice star Surya Yalamanchili recently weighed in on the power of Internet users to respond to issues of racism surrounding the treatment of Indian actress Shilpa Shetty on Celebrity Big Brother UK. It's a situation that demonstrates the hyperreality of "reality" television and its crossover into the blogosphere.
"The Museum as Outdoor Movie Screen" or, What IS Cinema? C3 affiliated faculty member Ted Hovet writes about a new film at the Museum of Modern Art that involves eight projectors showing a film on three different exterior surfaces of the museum.
Choking the Golden Goose: In Advertising, Ubiquity Is the New Exclusivity? Based on a New York Times story, this post examines how pervasive advertising is testing the limits of the theory that all publicity is good publicity.
The Convergence Manifesto IV: The Importance of Quality Storytelling. The fourth part of this series looks at how, at the heart of any corporate attempt for synergy or convergence or any of these other concepts lies the need for good storytelling of any media product, whether it be news or entertainment.
The Convergence Manifesto III: Quality Storytelling in Soap Operas. The third part of this series looks at various examples of transmedia attempts in soaps that have been mentioned here in the past and the ways in which soaps are only scratching the surface of the power of transmedia storytelling.
The Convergence Manifesto II: The Journalism Industry. The second part of this series looks at convergence in the journalism industry in particular, focusing on the concept of the uberjournalist and how it conceals what transmedia journalism done correctly looks like.
The Convergence Manifesto I: Convergence--The Buzzword. A republished newsletter piece from back in September appears in this first of a four-part series, looking at the true meaning behind the "convergence" hype.
Quoting and Piracy: How the Industry Lumps Together Two Very Different Activities. There's a major difference between stealing content outright and quoting it in a mash-up, but the industry is having a hard time figuring out economic models for how to prosper from fan creativity. Rather than address hard questions, though, many in the industry just prefer to run from fair use and still pretend users have as few rights as possible.
"Less Hitty" Shows and the Cancellation of Passions. On the same week that Chris Anderson warns the industry at the NATPE conference that today's television hits are just not going to be as valuable as before and that there has to be a shift in focus for the economic model, NBC cancels the soap opera Passions to make way for a fourth hour of its morning show.
New Statistics and Initiatives Meant to Revitalize Syndicated Programming's Relationship with Affiliates, Advertisers. The Syndicated Network Television Association reports that viewers have a higher degree of "trust" in their stars and that those with digital video recorders were less likely to skip commercials while watching syndicated programs and also more likely to watch them same-day. But what do those stats really mean?
Replacing Viewing Fees with Advertising Leads to Huge Growth in Web, Mobile Big Brother Views in UK. Endemol UK has found a substantial spike in viewing for online content when replacing a pay-per-view model with ad-supported content, but does this demonstrate a desire for online ads or discontentment with the pricing for online content?
24/Sprint Deal Provides 24 with Ancillary Content, Sprint with Substantial Product Placement. Sprint products will appear throughout the Fox series while providing its users with previews and other tools. But will fans find the ancillary content useful or merely corporate hype of transmedia that falls flat in execution?
"15 Seconds" of Fame Meaningful Use of User-Generated Content or "A Load of Crap"? A new CBS initiative allowing YouTubers to make 15-second clips that may air on the national network leaves critics questioning the value of such uses of the creative abilities of the masses.
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--------------- CLOSING NOTE ---------------
Pakistani Uses of Orkut and Facebook
By: Huma Yusuf
Mention the social networking site Orkut.com in the US, and someone will mumble about how it used to be cool until it was co-opted by random Brazilians and a bunch of Indians. The fact is, even though social networking sites aim to promote transnational connectivity, online communities are to some extent geographically located. After all, the desire to have a majority of your FOAFs (friend of a friend) be in the same time zone is understandable. And so it happened that in the summer of 2004, soon after a "bunch of Indians" inundated the site, Orkut.com became the social networking site of choice among young Pakistanis.
Within weeks, the social lives of English-speaking elite Pakistanis with late-night access to computers and DSL connections in urban centers such as Karachi and Lahore were mapped onto Orkut. Thanks to the site, it began to matter less that most urban, Pakistani youth lived at home with their parents, had to abide by strictly imposed curfews, and were discouraged from being seen in public with members of the opposite sex. Pakistani "communities" - a grouping and tagging feature offered by the site - proliferated, and Orkut quickly became the best way to flirt, advertise events, and befriend those with similar interests who fell beyond one's extended family or school year. For expatriate Pakistanis and students enrolled at international schools and universities, the site proved to be a great forum through which to keep up with the gossip at home.
But the honeymoon seems to be over. During the last two months, most connected young Pakistanis have switched loyalties and are now busy establishing networks on Facebook.com. Interestingly, the virtual migration highlights the fact that while social networking sites hope to facilitate relationships across all barriers, they continue to fall victim to the physical, geographic realities of the communities that inhabit them.
Firstly, the technological shortcomings of Orkut are now less tolerated by Pakistanis who are enjoying unprecedented access to broadband connections. (In June 2004, only 40,000 users out of 2.5 million Pakistanis using the internet subscribed to broadband connections. The number has since more than doubled.) In September 2004, social media researcher danah boyd complained on her blog Apophenia that Orkut crashes far too often. As wi-fi access becomes a standard feature of trendy cafes, this complaint has become a common refrain among connected Pakistanis.
Other design flaws that boyd highlighted two years ago - it's impossible to delete an Orkut account, pictures once posted are almost impossible to remove - are also more annoying to Pakistanis who can now 'comparison shop' at other social networking sites such as Tribe, LinkedIn, and MySpace that were initially difficult to access from outside the US. It also doesn't help Orkut's case that the site prevents its users from reverse engineering or linking their Orkut profiles to other online information about themselves or the work they do - as boyd explained, "I can't identify myself outside of the constraints of Orkut." So while social networking sites have gained popularity in Pakistan and are frequented by potential employers, casting directors, gallery owners, and music producers, Orkut's design inherently thwarts any attempts made by young Pakistanis to actually network through the social networking tool.
Meanwhile, the increase in the number of online Pakistanis has provoked a demand for privacy. For the past year or so, social networking sites - primarily Friendster and MySpace - have remained a hot topic in the mainstream media in the US as users have demanded that sites offer more privacy settings and empower them to contextualize their contacts--after all, you don't want your boss, father, and best friend to access the same information on your site profile. In Pakistan, more so than, say, in the US, users don't want their conservative bosses to know how and where they party, nor do young women want their future in-laws to see how many men have been posting scraps on their Orkut message boards.
As it stands, Orkut allows all users to view each other's profiles, friend lists, and communities. The most popular feature amongst Pakistani users is the 'reverse-stalker' mode that allows individuals to check who has been viewing their profile and friend lists. The site also arranges one's friends according to an often inexplicable hierarchy and offers a controversial 'fan' feature through which users can describe themselves as 'fans' of certain friends and not of others. Writing on Apophenia, boyd critiqued the fan feature: "And worse... i can see who is a fan of others. This means that i can check on my friends and figure out that they're using the fan feature... just not on me. Hello, socially awkward."
This element of social awkwardness is even more pronounced in developing countries with limited internet access such as Pakistan where greater levels of real-world social capital and physical proximity mean that technology-mediated relationships are merely extensions of everyday interactions. It is this desire for privacy that has prompted Pakistanis to switch to Facebook since the site's standard privacy settings enable only those people who have been pre-identified by the user to view certain data available on individual profiles. Of course, it will be interesting to see how Pakistanis use Facebook's News Feed and Mini Feed features - streaming data provision features introduced by the site in September 2006 amidst a great privacy hue and cry.
Of course, the uniquely Pakistani circumstance that has driven users off Orkut and onto Facebook is unfortunately one over which the site's management has no control. Ever since the Pakistani authorities launched a mandate for effective e-governance and equipped Karachi's police stations with computers and broadband connections, police officials posted in the city's affluent residential suburbs have been trawling through Orkut message boards, taking note of party invitations, proposed gatherings on the beach, and clumsy adolescent attempts to arrange a romantic rendezvous. After all, breaking up parties, catching young couples on dates, and harassing groups of wealthy teenagers rank among the most efficient, rewarding, and safe ways in which to pocket hefty bribes from concerned and embarrassed parents. Until social networking sites become cognizant of the socio-political contexts in which their international users access their services, they'll find that online communities outside the US are fickle and unpredictable.
Huma Yusuf is a graduate student in the Comparative Media Studies Program at MIT. After graduating from Harvard University in 2002 with a Bachelor's degree in English and American literature, Yusuf has worked as a journalist in Pakistan, winning the UNESCO/Pakistan Press Foundation 'Gender in Journalism 2005' Award and the European Commission's 2006 Natali Lorenzo Prize for Human Rights Journalism. With the support of the Higher Education Commission of Pakistan, she is currently launching a first-of-its kind webzine, the goal of which is to provide an alternate forum where journalists, academics, and media students can examine and critique the Pakistani media industry at large.
Compiled and Edited by Sam Ford (firstname.lastname@example.org)
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