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Until now much of the discussion around app store platforms and developer communities has been a technical one focused on primarily on APIs (which ones to open to third-party developers when and why), toolchains and toolkits (the optimal level of integration and how to achieve it) and development costs (value for money and how to deliver it). However, my first encounters with the 150+ developers and mobile execs that attended the combination Nokia Developer Day and Mobile Monday Austria at the University of Hagenberg which is also home to Europe's leading mobile computing department has convinced me that I (and the industry) must move the discussion to another level.

What do developers really want/need in order to make apps and (ultimately) make money?

Why is this question key? Put simply, the companies that get this right will have insights to build the correct mix of capabilities to forge and support a tight-knit developer community, creating relationships that will allow them to take a central spot in the emerging apps value web (not chain it's not that kind of a game).

There are no easy answers, but the panels and discussions during the dev day confirm that developers creative people who are interested in cash AND community are likely to gravitate to platforms and app stores that help them cultivate and connect with their fans.

LITMUS LEARNINGS

I first started thinking this through during Mobile World Congress (MWC) and the no-holds barred session I moderated on OneAPI. The panel made up of the architects behind this milestone move: Nauby Jacob, VP, Users Experience, Bell Canada; Larry Baziw, Director Next Generation Services Strategy, Rogers Wireless; SandipMuckerjee, VP of Business Strategy and Marketing, Alcatel Lucent; Shane Logan, Director, Services and Collaboration, Telus; and Al Snyder CEO, Aepona examined what developers require and how/why operators and enablers can/must work together to deliver. The positive feedback has been overwhelming and I have reached out to each of the participants to participate in a follow-up roundtable podcast on MSG, so watch this space.

(By way of background, the GSMA launched the commercial pilot in Canada as part of its OneAPI initiative, working with Canada's leading operators to demonstrate the viability and benefits of providing developers standardized APIs for mobile networks. The pilot in Canada the topic of my MWC panel represents the first time developers are able to gain commercial access to the network assets of multiple operators from a single gateway. )

But it was the opening presentation by Paul Golding pioneer, long-time thought leader in the mobile applications space and, more recently, a consultant to O2 Telefonica that challenged everything we (think) we know about developers.

When Paul took the podium and showed the opening slide where he had purposely crossed out the title of the planned presentation and replaced the words Supporting Developers with EmPOWERING Developers it was clear that this was no marketing-speak. His message to us: Developers need feature-rich APIs and much, much more. (Indeed, Paul's thinking on this topic left a deep and lasting impression, and I am pleased to report that Paul has agreed to join MSG's roster of authors and contribute a guest column that builds on his simple, elegant and path-breaking ideas.)

In his presentation (here on SlideShare) Paul introduces three kinds of power that interest/attract developers most.

CONNECTED POWER is all about the APIs and platforms that allow developers to reach customers; CASH POWER is all about the APIs and platforms that allow developers to earn money (directly or indirectly); and COOL POWER is all about the APIs and platforms that allow developers to do something cool and interesting (translated: innovate).

Sure, it's about technology (CASH POWER). But it's also about harnessing everything we know from the business books about encouraging and channeling creative energy to cultivate developer communities that make great apps to delight the customer (CONNECTED POWER).

And with a nod to Eric von Hippel, my favorite interview, author of Democratizing Innovation and THE authority on innovation it's about connecting developers with their lead users the users who have a high incentive to solve a problem and the ability to innovate (COOL POWER). Combine all that (translated: enable all that) and it can yield a developer community and a selection of apps that can truly set the bar.

As Paul pointed out: O2 Litmus has recruited 7,000+ O2 UK customers and then helped developer connect with them to gain insights and interestingly lay the groundwork for a kind of app developer fan club that provides developers important feedback and critical buzz. (After all, fans will share their picks of favorite apps and cool developers with others creating the same kind of virtuous cycle than can catapult local bands to rock heroes.)

Paul has an even better idea: Operators can help the process by simply putting fans in touch with developers. Add some other cool brands to the mix and then let things happen.

At this juncture, I am also reminded of Mob4Hire and the traction it has gained for its awesome concept which combines crowd sourcing with app testing. It's a super-sharp business model that Paul Poutanen, Mob4Hire President and Founder, tells me he is expanding to allow people testing the apps to rank/share the ones they like most with everyone else. A great grassroots way to help apps get discovered and gain mindshare. More about this in an exclusive interview with Paul later this month.

The takeaway here: helping developers connect with people (fans) is emerging as key requirement of app stores and platforms.

NOKIA DEV DAY

When Mobile Monday Austria reached out to me to speak at its event over the weekend, one that also allowed me access to developers and other people who love mobile, I was thrilled. It offered me an important opportunity to sanity-check some of Paul's key messages and test a few of my own ideas about the future of app marketing.

Cool Power: Yes, it matters a lot! An informal poll of developers yielded a welcome confirmation of the qualities platforms/app store providers must have beyond awesome, rich-feature APIs. Put simply, developers require partners that help them create apps and generate revenues. And they will align themselves (eagerly) with those companies that make a conscious effort to help them connect with customers, cultivate fans and allow them to feel that they have made a contribution that matters in the scheme of things. For some developers, a functioning feedback loop tops the list. For others, being able to believe that the platform provider really listens, absorbs, respects and internalizes constructive criticism is paramount.

This came across loud and clear when naxxatoe, a developer in the audience, took the microphone to tell Nokia execs what should be at the top of their Ovi agenda. It's about connecting people, he said, unaware of the play on Nokia's own motto (Connecting People).

Kudos to naxxatoe for saying what had to be said and my respect goes to Jure Sustersic, Forum Nokia Biz Dev Manager EMEA, for seeking out naxxatoe and other developers between sessions to hear them out on what they loved and hated about Ovi. (Inspired by this exchange I have decided to produce an informal series of podcasts to give these developers a voice. My sincere thanks to naxxatoe for challenging me to think and see things very differently. I look forward to showcasing his ideas in the first in the series later this month.)

SUPERMARKETS VS FARMERS MARKETS

Regular readers will know that I am a great believer in the individual. We will accept the content we want on our terms and we are most likely to accept content (and mobile marketing/advertising can be considered a form of content) if it is in tune with our interests, passions and context. Mobile (an intensely personal device) allows us to communicate all of the above, allowing (with our permission!) content and services companies a way to connect the dots and provide us with stuff (content, services, apps, advertising and all things digital) we are likely to appreciate.

Obviously, there is little room in the scheme of things for one-site-fits all. In fact, our requirement (even demand) for stuff we want the way we want it sits at the core of the Long Tail. While Chris Anderson didn't explore mobile in his milestone book, we have nonetheless witnessed the impact in mobile. It began with an avalanche of content and then a plethora of portals where we could find it. (Well content discovery and search is another issue altogether)

Fast forward and we are witnessing the emergence of a Long Tail of app stores.

My Mobile Monday presentation (which included the findings of the recent Netsize Mobile Trends Survey) explored the evidence for this mega-trend and why this could be good news for developers. For one it means more choice for us (a key requirement for a successful app store, according to the Netsize survey). But it also means more choice for the developers, many of whom told me they are actively seeking alternatives to the Apple app store where they have to beg for shelf space (so that their app might be accepted/included) and then pray for promotion (so that their app might be featured where people can find and buy it).

With 25+ app stores and counting we can't say we have a Long Tail. But there are more options then ever before. Want an enterprise app? A good chance you might find it at Ondeego. How about a porn app? MiKandi is a good bet. And the list goes on

With these observations (and in preparation for my talk) I reached out to Mike Lurye, Director, Product Marketing Amdocs Interactive. After an invigorating brainstorm session we agreed that there will be many kinds of app stores, managed in many different ways.

There will be Supermarkets (app stores such as the Apple app store) where the provider gives suppliers shelf space, sets the prices and is pretty much focused on moving merchandise and making money. And there will be Farmers Markets (niche app stores and operator app stores and combinations of the two) where the relationship between the supplier (a farmer with fresh produce) and the customer (people who really appreciate the opportunity to buy organic) is what clinches the deal.

Surprisingly, it was this observation and the suggestion that there will be marketplaces that fit their needs that got the buzz. Developers took the microphone and told me they would indeed want to sell their apps via a farmers market if they could. Several even asked me how they could get into contact with a Long Tail app store.

And thanks to Mike I can point to a little known example that shows this approach is not only an ideal it is also an ideal business model making money now. (BTW, I am also pleased to report that Mike has also agreed to a podcast to explore the supermarket/farmers market analogy and much more! I'm scheduling the appointment as we speak, so check back regularly or follow us on Twitter.

MALAYSIA SHOWS THE WAY?

Malaysian mobile operator Maxis has an app store and a mission: to nurture and foster interesting developer applications for our community. (An excerpt from this must-see video interview with Nava Wathan, Director 1Maxis, Maxis Communications.)

In Nava's view, the operator app store is not impacted by handset app stores because consumers will go both ways. They will go to the Supermarkets (my wording) and they will also visit the Farmers Market. In the case of Maxis, the farmers market approach revolves around its sharp focus on local Malaysian apps more relevant to the Malaysian consumer. Thus, Maxis is the place to go for something that is Malaysian.

But it's not just about enabling choice; the operator benefits from enabling payment. Maxis has opened up billing APIs for micropayments in apps and is looking to do the same for location, P2P sharing and advertising (allowing the developer to pull an add from Maxis instead of talking to ad agencies around Malaysia).Finally Nava sees that his company can also play a key role in connecting its developers with markets outside Malaysia. Put another way, Maxis can expand the reach of local developers by surfacing our apps from our local developer community on app stores run by the handset makers.

My take: As my upcoming series of podcasts will show, developers want to make money but they also demand a feedback channel that will allow them to consistently create better apps for their fans/customers. (After all, recurring revenues are the key to real and sustainable business). They also want some more say in how their apps are marketed and assurances that the app store/platform provider that they like a farmers market will do what they can to help developers build and nurture the relationships they need to innovate and ultimately succeed. One-off sales or fan following? Developers appear to want the latter. It's now up to the providers to decide what they want to be (supermarkets or farmers markets) and execute. I know that Nokia has taken careful note of developer's gripes and suggestions during the event and I will reach out to Nokia soon for their thoughts.

***

My personal thanks to the organizers of this excellent event Aleksandra Schmid and Philipp Nagele (Mobile Monday Austria) and Mark A.M. Kramer. It was a great idea to link a mobile developer event with a Mobile Monday. It has exposed me to new ideas and allowed me to make some new friends. Warmest regards to naxxatoe and to the other developers who connected with me to share their platform likes/dislikes, and to Dave Dempsey from Radio FM4, who moderated the event and brought some valuable views into the discussion. If ever someone has the interest and empathy to bridge the divide between developers and everyone one else it's Dave. I hope someone reaches out to him to do just thatI'm sure the results would rock!

Film critic Roger Ebert may have lost his voice, but he found it again on the web. In addition to his usual film reviews, Ebert runs a very successful blog, and is an avid Twitter user. Now the critic is looking to monetize his blog which is apparently not profitable with its current advertising setup by starting The Ebert Club.

For an annual fee of $4.99 ($5.00 after April 1), Ebert will offer his fans a variety of content delivered to their email inbox including links to recent postings on his blog, and selected Twitter updates. There will also be a private discussion thread for members, which Ebert says will resemble his comment threads and feature a private URL. Members will also have access to The Web Report (Ebert's collection of unexpected and delightful web discoveries), other special pages, and will get advance notice of Ebertfest tickets going on sale.

Ebert discusses his exploration of web monetization over the years from porn, to penny micropayments, to paywalls in a recent blog post announcing the club. He and former fellow movie-critic Gene Siskel apparently dreamed of the monetization possibilities presented in Nicholas Negroponte's 1995 book, Being Digital. Negroponte argued that the critics could earn significant amounts by charging users two cents to read their reviews. That idealized vision of micropayments never really came to fruition, but we still see hints of it today with the massive success of inexpensive mobile applications on the iTunes App Store.

He brings up Newsday's paywall failure as a prime reason for not going behind a paywall completely, and offers the following reason for not running more movie-related ads:

I'm not part of the usual studio buy for purposes like that. For the better films, I should be. I am the most-read movie critic on the web. I don't think the studios give a shit about critics. Their online budgets gravitate toward sites with celeb photos, downloadable wallpaper, gossip,exclusive trailers, that stuff. My readers actually buy tickets and go to movies at a much higher rate than the national average; just read one of the comment threads here. But for the big tentpole movies, you know what? The marketing people aren't looking for readers. They're looking for buzz.

With the club, Ebert is implementing a solution a bit more realistic than Negroponte's penny micropayments. It's more akin to a Paypal tip jar with benefits. Personally, while I'll probably glance at the special offers made available to club members, the real reason I joined the club is due to my love for Ebert and his work. I want to support him in whatever way I can, and I'm sure there are others who've joined for similar reasons.

After he was diagnosed with thyroid cancer in 2002, Ebert underwent multiple surgeries that left him without a voice and a lower jaw. He used a computerized voice over the past few years, and recently unveiled a computer voice that duplicated his own developed by the text-to-speech company CereProc.

Mobile giving campaigns are already under way for relief efforts in Chile, which experienced a massive 8.8-magnitude earthquake Saturday morning. Americans can text the word CHILE to one of several short codes to donate $10 to the American Red Cross or Salvation Army, among other groups, and can donate any amount by texting the word CHILE and a dollar amount to the short code 27138. Whether or not the carriers will speed up the delivery window between the text and the actual donations as they did for Haiti is another question.

Donating via text has been around for more than two years but attracted national attention after users donated more than $41 million following January's devastating earthquake there. While that figure shattered previous text-giving records, at least some of the Haiti contributions were surely driven by the novelty factor. So it's unclear whether the tremendous success of the Haiti campaigns are indicative of how much we'll continue to use our phones to give. Readers, what do you think? Let us know in the poll.

Related content from GigaOM Pro (sub req'd):

Could Activist-Style Micropayments Be a Real-Time Ad Model?

Image courtesy Flickr user Globovision.

The raging controversy over paid content on the Internet just received a dose of reality from David Moore, the founder of 24/7 Real Media and chairman of the board of directors of IAB (Interactive Advertising Bureau).

In addressing the IAB Annual Leadership Meeting on February 21, Moore proposed an easy pay system that he said would need to be adopted by all premium publishers. The idea would be for publishers to collect 10 cents per session, or one cent per page, from consumers who wanted access to preferred content. A consumer would have to spend at least $10 before being charged by a publisher.

Moore believes the program will only work if publishers cooperate and agree to implement it broadly. Totally free content is dead, said Moore, who pointed out that 10 cents for a user session is equivalent to $100 CPM, an incredibly attractive advertising rate. Basically, Moore said, people will inevitably have to pay for premium content, since advertising alone will not be able to support it.

Moore is essentially lobbying for a micropayment strategy to be institutionalized across web publishers. While his solution makes sense, the micropayment argument isn't universally accepted by any means. In a recent blog, Freakonomics co-author Stephen Dubner asked four industry observers whether they thought micropayments would work.

Alan Mutter, a media/technology consultant who's on the adjunct faculty of the Graduate School of Journalism at the University of California, Berkeley, agreed that a micropayment system was possible, but it wouldn't work for one publisher if a competing publisher decided to provide the same, or nearly identical, content for free. Mutter seems to agree with Moore that widespread adoption is essential, he says it would require a critical mass of publishers to agree to collaborate more earnestly, more broadly, and more smoothly than any group of humans in history. Could it happen? Theoretically. But don't hold your breath.

Marshall W. Van Alstyne, an associate professor at Boston University and a research scholar at MIT, depicts the problem this way: Putting micropayments on news is like putting tollbooths on an open ocean. the interests of a free society are rarely served by building barriers between people and the news. Instead, Alstyne thinks other solutions are needed. He mentions three possibilities: Charge technology vendors a flat fee to put free content on cell phones, e-book readers, and laptops; offer two versions of information, one free and ad-supported, and one that's faster-loading and more graphics-rich for a modest subscription price; or, find a way to match people to content, and in so doing, offer advertisers the ability to micro-target.

William Baker, an executive-in-residence at Columbia University, thinks combining advertising, subscription, philanthropy, and micropayments into a single comprehensive solution could work.

Clay Shirky, an adjunct professor in New York University's graduate Interactive Telecommunications program, thinks micropayments are doomed in part because the competitive loss of hiding them behind a paywall reduces the users' ability to share them with friends, and it is this secondary distribution that creates the most important new opportunities online.

I credit David Moore with putting an easy pay system on the table, but it seems that the micropayments issue is about as complex and controversial as national health care reform and we all know where that stands right now.

eBay CEO John Donahoe told a Goldman Sachs technology conference today that the company's PayPal subsidiary wants to become the de facto payment engine for social media, the Wall Street Journal reports. We want to be the platform on which some of these social-media applications get built, he told the attendees, referring to Twitpay a service that allows users to send payments via Twitter and was recently acquired (after failing to gain much traction) as an example. PayPal has been trying to open itself up to developers in order to allow them to build payment more easily into their services and software, to that end launching a developers conference to talk about its open platform several months ago. And it has had some success attracting social networks, including Facebook, which said last week that it will use PayPal for transactions for virtual goods on the site.

Donahoe effectively pitched his service as the only game in town for large-scale social payments, saying:

The risk and fraud capabilities you need, the anti-money launderingthe ability to do it cross-border are very different things than just providing a virtual currency.

Facebook confirmed when it announced the PayPal deal that it was the complications of multiple currencies and international transactions that led it to choose the eBay unit as a partner, since 70 percent of its users live outside the U.S. It's worth noting, however, that PayPal has had its own difficulties with international payments, as a recent ban on transfers to India illustrates. Donahoe also told the conference that he sees a growing demand for payments involving digital goods, and that PayPal has been talking to companies including Zynga, the leading maker of Facebook-based social games.

I see that trend, particularly in virtual goods, continuing. PayPal is well positioned to be the foundation for many of these digital goods.

The Facebook arrangement makes PayPal the engine behind Facebook Credits, an in-network payment scheme that the social network is pushing game makers and others to use, which gives Facebook 30 percent of the proceeds from each transaction. According to one analyst, such payments could become a $100 million business.

PayPal still has a lot of work to do before it can become the engine behind every social network and social media service, however. As Kevin Kelleher pointed out recently, the service is barely even present on mobile devices, despite the fact that the iPhone and other smartphones have been a dominant market force in social networking for well over a year now. Instead, much of the recent buzz has been around Square, the hot new mobile payment gizmo created by Twitter co-founder Jack Dorsey. As entrepreneur Patricia Handschiegel noted in a blog post about Donahoe's pitch to Goldman Sachs, PayPal has to start doing some innovating of its own, instead of just hoping to hitch its wagon to everyone else's innovations.

Related content from GigaOM Pro (sub req'd):

Could Activist-Style Micropayments Be a Real-time Ad Model?

Post and thumbnail photos courtesy of Flickr user cindy47452

Every entrepreneur is familiar with the moment. The moment when you stumble across an annoying problem a problem that you'd pay money to solve and suddenly a synapse fires in your brain.

Holy crap, if I'd pay money to solve this, so would other people. There's a business here!.

It's the moment that has kick started a million businesses and generated billions of dollars over the decades. And on Sunday evening, not for the first time in what I laughingly call my career, I experienced it.

I'd filed my TechCrunch column earlier in the day and with little else planned, I decided to relax by watching some old episodes of Jonathan Creek: the BBC comedy drama about a magician's assistant who solves seemingly impossible crimes. The show ran for four series in the UK between 1997 2004 and, I think, was also shown on BBC America. I've looked for the DVDs over here but I can't find them, nor can I find a legal way to view them online. Like the petty criminal that I am, then, I headed to YouTube. Sure enough all four series were there, as was a recent one-off reunion special.

As I worked my way through the entire back catalogue, I remembered just how great a show Jonathan Creek is. David Renwick's scripts are brilliant apparently each one took him several months to write, thanks to the intricacies of the puzzles each episode contains. The show is so good in fact, that I started to feel guilty: I know that Renwick isn't going to receive a single penny of residual payment from my YouTube viewing. If only there was some way to contact him, tell him how much I enjoy the show, and offer to send him some money for the lost DVD sale. (Note: it's not the BBC I care about losing money they can afford it but Renwick himself.)

And then I realised that I'm not alone in having this desire, or alone in wanting to pay money to solve it. In fact several times recently I've found myself on the other side of the equation. Back in December, I decided to give away the US ebook edition of my last book for free, online. My reason for doing so are outlined here basically it wasn't widely available in the US and I wanted people here to read it so they might buy my next one.

Since then I've had several dozen emails, tweets and other digital notes from people who have read the book for free, asking if there's any way they can retroactively pay me some money to say thank you. No, really. Most asked for my Paypal details, or a way to send a check for the ebook cover price of $9.99. Others offered to buy me $9.99 worth of beer at events they knew I'd be attending; an offer which would have been much more enticing had I not given up drinking last October.

And that's when I had the moment. I want to pay David Renwick for work of his that I've already enjoyed, but I can't. People want to pay me for work of mine, but expect through some tortuous email exchange, which resulted in me turning down the dozens of offers of money because it seemed somehow weird they can't.

I thought of putting a note on my site suggesting that people donate to charity instead, but I couldn't figure out the best way to implement that, or to thank/reward the people who did. Equally, there's no way of me finding out what Renwick would like me to do to reward him send him a check? Donate to charity? Buy something from his Amazon wishlist? Does he even have one?

Of course, I'm not the first person to realise that there's a need for content creators to be rewarded for stuff that is consumed for free online. Peter Sunde, the founder of Pirate Bay, recently announced the launch of Flattr, his micropayment service that allows creators to be paid tiny amounts of money for their work.

Subscribers pay $5 a month, which is then divided up equally between all of the Flattr-enabled sites that the user wants to reward during that period. Setting aside the irony that the guy behind Pirate Bay is now claiming that creating content should be rewarded ( People love things and they want to pay he told the BBC, with a straight face), the fact remains that Flattr is a terrible idea.

Dividing your monthly subscription equally amongst all of the sites you enjoy means that the more you use the service, the less each site gets. And given that all of these services have a minimum pay-out (usually between $50-$100), it will be a long time before most creators will see any real reward. Also, the service puts all of the effort in the wrong place. I'm simply not going to sign up for $5 a month in the hope that the creators I enjoy will all use Flattr. There are a whole load of competitors: Sprinklepenny, Kachingle et alI'd have to sign up to them all to cover all my bases.

For me, as someone who straddles both sides of the creator/audience fence, the idea of micropayments as a way to reward creators is a non-starter, mainly because it fundamentally misunderstands the psychology of why we want to reward creators.

Sure, part of the reason I want to pay David Renwick is guilt a desire to do the right thing. But even that guilt has selfish motivations: if Renwick isn't properly rewarded for creating something that gives me so much pleasure, I'm worried that he might be discouraged from continuing. I want to encourage him to carry on writing, so I can carry on enjoying.

Much more powerful is the fanboy motivation. Within all fans, there's a subconscious desire for the artists they admire to be aware of that admiration. That's why people send fan letters not because they're expecting a reply, although that's a nice bonus but rather for the fantasy that the artist will read it. We want a connection with our heroes. Allied to that desire to be noticed, is the desire for our peers to appreciate our generosity. There's a reason why charity donation sites usually display the names of donors, and the amounts they've donated. It's an ego thing if I see that my peers have donated an average of $10, I want to donate $20 to prove I'm more generous and it drives the average donation upwards.

Giving 1c, or even $1, as part of a regular monthly split through services like Flattr does nothing to satisfy any of those desires. Splitting a regular monthly payment between dozens of creators doesn't allow me to form a connection with any one of them. Such tiny amounts won't encourage them to keep creating, nor will they allow me to show off my generosity to my peers. And of course, the chances of my favourite creator being registered with Flattr or any other single payment service is close to nil.

For all of those reasons, micropayment services are a non starter. An embarrassment, even.

Instead what someone needs to build is a macropayment service. A way to make a one-off payment to a specific creator to thank them for their entire body of work. If you insist on using a micro' word, then the correct one is micropatronage': an affordable version of the age-old practice of wealthy patrons supporting artists in substantive, public ways ways that stroke the patron's ego and/or guarantee their place in heaven.

Specifically, I'd love to see a service that allows me to reward David Renwick or any other writer, journalist, artist, singer, filmmaker, or content creator for his entire body of work. The value of the reward might be $5, or $10 or, if I'm wealthy, $100 or even $1000. The important thing is that I get to send the reward directly to the creator, and I get to show off that I've done so.

Here in specific terms are the four things the service should allow me to do

• Make a payment' in whatever form suits the creator: through a Paypal transaction, by buying something from their Amazon wishlist, by donating to their favourite charity even by paying off their bar tab at their local pub. It's up to them. The more creative the better, actually. I'd love the idea of rewarding a starving artist through Pizza Hut gift certificates, if that's what they want.

• Display the payment publicly. I want to Tweet that I've made the payment, or add it to Blippy or whatever. But more importantly, I want my payment to appear on the artist's website, along with my name. That way, I feel like my fan-dom is being acknowledged both by the artist and by other fans. What would be super cool would be if the artist figured out some other way to reach out to fans who support them: maybe people who donate over a certain amount get a DVD/signed book/print/whatever. But, again, that's up to them.

• Allow me to reward the artist directly. No bullshit 10% commissions like Flattr charges. I'm a fan of David Renwick, so it's him who should get the money, not the dude who created Pirate Bay he's made more than enough hay from other people's creativity.

• Reward artists who aren't signed up to the service. This is the big one. For a system to work, users have to be able to use it to reward anyone. That's one of the things that made Paypal so successful. All you need to do to pay someone using Paypal is to enter their email address. If they don't have a Paypal account, they receive an email inviting them to sign up to receive the money which of course, due to the financial incentive they do. This service should be the same. If the artist I want to reward isn't registered on the service, I should be able to enter their email address and have the service contact them, asking them to choose how they'd like to be rewarded. When they've done that, I get an automated email with a payment link and am able to send the reward via whatever method they've chosen. Obviously once they're signed up, future payments can be processed straight away. And if I don't know the email address for a particular creator? No problem I can enter their publisher, record label, newspaper or whoever else distributes their work and the site will figure out the correct contact email. Publishers forward mail to their authors all the time.

and that's it. As a consumer' (urk) of content, I want that service to exist so that I can start rewarding people using it. As a writer, I want that service to exist so that I can add myself to it and display a little logo on my site that links to my listing. That way, next time someone feels the urge to reward me, they can do so without having to ask first.

So what to do with this idea? If I were an entrepreneur, the answer to that would be simple. I'd figure out the specifics of how such a service might work, and then I'd build it. Or at least hire someone to build it. I'd set up a company either raise some seed money or boot-strap the thing myself. I'd do market research and figure out business models and all that stuff. I'd probably give it a name like Guiltvault or Micropatron (both gone). Maybe it would work, maybe it wouldn't. That's the fun of being an entrepreneur.

But I'm not an entrepreneur. Moreover, I've been one several times and I've sworn never to go back to that world. Also, there's a part of me that thinks this idea could work best as a non-profit. Or even perhaps as a kind of open standard thing. Certainly with all the rewards going directly to the creators, no one else is going to get rich out of it which might actually be the secret to getting publishers, agents and trade bodies on board with it.

So instead of drawing up an NDA and building a business, I've decided to do the opposite: to release the idea into the wild in the in the hope that someone or some group of people might want to run with it. For once, I'm actually encouraging the wisdom of TechCrunch commenters: I'm curious to know how you see the idea working, or why you see it failing. And if anyone with a history of making things actually happen feels like having a crack at building this, then you have my blessing. I'd be delighted to track your progress here on TechCrunch.

For my part, I've vowed to stay out of business and it's a vow I plan on sticking to. But if I can be of any help connecting people or throwing ideas into the ring, then give me a shout. Either way, I'll be the first author to sign up to use it.

And, hell, if you make a billion dollars from the idea, at least you'll know how to reward me for my contribution.

Google may have lost to Apple in its bid to acquire Lala, a music service that grabs users' digital music collections and hosts them in the cloud, allowing them to add to those collections for a mere 10 cents per song. But it would be nuts to count out Google in the race to replace iTunes' pay-per-download model with a cloud-based music service that is easy and attractive enough to convince non-music-buyers to open their wallets.

The tech behemoth has traditionally steered clear of music, reportedly because co-founder Sergei Brin isn't a music fan and on at least one level, Google is about addressing its co-founders' needs. (The somewhat-botched launch of Buzz, which Brin apparently loved, is one example of this).

Apple has owned digital music market since it essentially created that market with the launch of the iTunes music store in 2003. Since then, the company's one-two punch of iTunes and iPod has fended off all comers.

But we're approaching a major inflection point in the short history of digital music, a time when we stop administering our own music collections on local hard drives build then instead online where they can be accessed on a multitude of connected devices smartphones, netbooks, tablets, computers, televisions, bookshelf systems and cars without the tedium of managing each and every file transfer by hand.

And, piece by piece, Google is slowly laying the groundwork to be a player in that space.

What Google Has Done

So far, Google's approach to music has been very un-Google: Send users to the walled gardens of Lala, iLike, Pandora and Rhapsody. Former SeeqPod CEO Kasian Franks told us that lots of illicit music search services use elaborate Google queries to find MP3s on public servers, so Google could have built a music service or vertical search tool that seeks out those files. (Even in China, where copyright views are generally laxer than they are in the states, Google has chosen to compete with the popular Baidu music search engine by linking to a licensed music source that includes a watermark with each download.)

Instead, Google has been playing nice with the music industry not only with Google music search, but with Vevo, the music video site owned in part by Sony Music and Universal Music Group. Vevo is already working well, tallying 35 million visitors and 13 billion views in December, the first month in which the service was available.

Of course, hardly anyone is going to Vevo.com to view these videos instead, they're going to Google's YouTube. By pushing music searchers towards licensed music services and collaborating with the major labels on Vevo, Google has set the stage for a more aggressive move into the music market, likely to be aided by the labels' long-standing resentment about Apple pretty much owning the digital music space.

What Google Is Doing

Even before it launches a dedicated cloud-based music service, Google might already be the top cloud-based music company in the world, in a sense, due to the popularity of music streams on YouTube. (It's even possible to download full MP3s from YouTube without paying a cent, using Dirpy or other tools.)

Following its failed bid (WSJ subscription required) to acquire Lala, Google is considering purchasing a U.S. and Israeli company called Catch Media, as reported by CNET. Like Lala, Catch has the ability to suck a user's music collection up into the cloud and serve it to them on a multitude of devices. (Melodeo's nuTsie an anagram of iTunes offers a similar feature and could also be a Google acquisition target.)

Catch Media differs from Lala in that it evolved from a system developed to allow customers of one bank to withdraw money from another bank's automated teller machine whereas Lala used to focus on helping people trade used CDs online. If Catch Media figured out how to let you withdraw money from a competing bank's ATM machine, perhaps it can figure out how to make all of our music playing devices access the same online music collection also for a small fee. The same way we pay (albeit grudgingly) to access our money from a third-party ATM machine, we could pay to access our music collection on a connected device whose manufacturer lacks a relationship with the online music service, dissolving the bond that glues Apple's hardware to its music store.

How Google Could Unseat iTunes

If music is broken, perhaps Google can fix it (see search, e-mail, document collaboration, long tail advertising, maps, phones, and so on). And Apple's widely-publicized dropping of DRM about two years ago means that most of the music iTunes users have on hand can be transferred just as easily to a Google cloud-based music service as an Apple one. The door is wide open for Google to poach iTunes users, especially if it does the following:

1. Lower prices, even if it means losing money initially. Lala currently sells streaming songs for 10 cents apiece a price Apple might be uncomfortable with, seeing as it generally sells music for ten times that. Google has no such cannibalization worries, so it should price streaming music at 10 cents or even lower. As with Gmail, which is free until you hit the storage limit, or YouTube, which lost money for the first few years, Google would have to be willing to eat a loss in order to win in the long term.
2. Make cloud-based music collections portable, so that if someone is dissatisfied, they can take their music (or rather, the data representing it) to another cloud-based service. So far, there's no big database that would allow people to grab their tunes and split. However, Google scored very well in our quick data-portability survey, which leads us to believe it would do the same for music. If any company would be willing to make its music subscription transferable, it's Google, considering its history in other areas.
3. Charge consumers micropayments to access large cloud-based collections, but not small collections. Users won't try it if they have to pay upfront, but the labels won't condone the service unless it charges users something to access their collections, hampering Google's ability to sell music as part of the plan. As with Gmail, this could be a low yearly fee for collections above a certain size.
4. Do something in the living room. Forrester Research analyst Sonal Gandhi, whom I will interview later Monday at a NARM Salon in Manhattan, claims the reason half of the U.S. population doesn't buy digital music is because over ten years after companies first began offering home-networked audio hardware, the category has yet to take off. If Google's going to beat Apple (which already has Apple TV and Airport Express) to the cloud, as far as music goes, the living room will have to be part of the equation. Alliances with companies such as Boxee and television manufacturers would help a great deal in this regard.
5. Continue to leverage search. Vevo is successful because people look for videos on YouTube, while Lala and iLike probably owe no small part of their traffic to Google's practice of placing them at the top of its search results. Meanwhile, Apple only recently created web pages for iTunes albums, and I've never seen one appear in a Google search result. Search gives Google a tremendous advantage in the race against Apple to own the cloud-based music space.

See Also:

• Google Closes the Loop on Music Search
• Google Launches Free, Legal Music Downloads in China
• Label-Backed Vevo Video Site Launches, But MTV Has No Fear'
• Google, Universal to Launch Music Hub Vevo'
• Google Talks Music at SF MusicTech Summit
• Google Prepares Music Search Service (Updated)

Photo of Google's music search launch in China: Flickr/keso

Over the last year or so, Facebook has been gradually ramping up its Credits system, which for a long time was used just to purchase virtual gifts (now you can use it to buy real gifts, songs, and it's been integrated with some applications). Today comes news that will make it even easier to buy Facebook Credits: you'll be able to buy them with PayPal.

The new partnership actually encompasses a few areas of Facebook's payments. Along with Facebook Credits, you'll be able to use PayPal to purchase Facebook Ads.

This is big news for both companies. PayPal has been trying to establish a greater presence in micropayments and on Facebook itself. And Facebook will now make it easier for PayPal's 81 million users to quickly stock up on ads and buy its credits, which are only going to become more important on the site going forward. Other payment options for Facebook include standard credit cards and mobile phones (using Zong).

One other reason why this is interesting: given Facebook's interest in extending itself beyond Facebook.com through services like Facebook Connect, it wouldn't be surprising if it started prompting people to start Paying With Facebook on external sites, which would make it competitive with PayPal. Given how nascent Facebook payments are this would likely be a long ways off (if it's even coming).

Note: I made the image above, so the payment screen may look a bit different.

Peter Sunde, whom you may know as one of the guys who created The Pirate Bay, is launching a new micropayment sytsem called Flattr. Above, a video explaining how it works. "Many large streams will form a river."

Mobile payments for micro-transactions on the web are steadily gaining traction. This morning, the space received more validation as several prominent venture capital firms made a significant a investment in recently launched mobile payments startup, Boku. Boku has raised $25 million in Series C funding led by DAG Ventures with previous investors Benchmark Capital, Index Ventures, and Khosla Ventures participating in the round. This brings Boku's total funding to $38 million since the startup's launch in June. Boku's marketing chief Ron Hirson tells me that the startup is also rebranding its consumer platform as Paymo, but will retain the name Boku on the merchant and publisher side.

Boku, which acquired competitors Paymo and Mobillcash in June, doesn't require users to have a credit card or bank account to make a micropayment. Users enter their cell phone number on the site, reply to a text message and then all virtual charges are automatically charged to the user's monthly cell phone bill. As we've said in the past, it's ridiculously easy. Because of its acquisition of Paymo and Mobillcash, systems that had significant international reach, Boku gained a strong base of users around the world.

Today, Boku's reach extends to 58 countries and 190 carriers, with two more countries (Latvia and Lithuania) being added by the end of the week. Carriers in Brazil and Argentina will also be added shortly and is expected to bring a large amount of users because of the high mobile phone usage stats in South America. Hirson says the new cash will be used to further the companies international growth and expand product offerings.

The startup is also seeing success on the publisher side, announcing 12 new partnerships with online game developers in the past month. In fact, since June, the company has developed mobile payment relationships with over 1,000 game and app developers to help power payments for virtual goods and currencies on many of the top social networks, including Facebook and MySpace. The startup currently powers mobile micropayments for both Playdom and Playfish, which was acquired by Electronic Arts.

One potential obstacle to mobile payments platforms is the high fees that mobile carriers charge to the payment systems (which are then passed on to the publisher). Boku told us last June that different cell phone carriers charge varying fees that range between 10% to 50% of the purchase price, which is a hefty amount in transaction fees. But it looks like Boku is on its way to remedying this problem. Hirson indicated to me that the company is in negotiations with carriers to bring fees. He said that carrier fees in parts of Europe will come down first and hopefully roll out to the Americas and remaining parts of the world.

Of course, its worth mentioning Boku's main rival in the mobile payments space, Zong, which struck a large deal last year with Facebook to pay for the social network's virtual currency. Zong also recently launched an alternative payments system, called Zong+, which lets users bill microtransactions to credit, debit and prepaid cards.

With $25 million in the bank, its hard not to imagine that Boku could snap up a few smaller players in the mobile payments and microtransaction space. When asked about the possibility of further buyouts down the line, Hirson said that while acquisitions aren't currently part of Boku's immediate strategy, he couldn't rule out the possibility in the future.

The irony of the report that The New York Times is going to start metering readers and charging those who come back more often is this: They would would end up charging and, they should fear, sending away the readers who are worth the most while serving free those who are worth least.

That's according to the math of News Corp., which argues that readers who come via links from search and aggregators and bloggers and such are worthless because they're not local and they don't stay; they're one-click-wonders. The readers who come back again and again, the ones you know more about and can rely on and target better and build relationships with, goes this logic, are worth more. And News Corp. is also threatening to charge them.

So why charge your best customers? Why single them out? Why risk driving them away?

The logic eludes me. So do the economics.

I know, the argument is that these readers use the content more so they should be charged more. But that is based on the assumption that content is a consumable, a scarcity that drains the more it is read. Of course, it isn't. Content is, instead, a magnet that can create relationships of value; whether that happens is up to the creator of the content and the quality of service and relevance is gives. That, dare I repeat it, is the basis of the link economy.

But note the verb that started off the paragraph above: should. Readers who read more should pay more. This is the product of journalism's sense of entitlement.

So why would The Times charge? There are a few possible reasons:

* It has failed at advertising, as I said of News Corp. recently.

* Its costs are too high and rather than cutting them into a rational business, it desperately seeks some other revenue.

* It is falling prey to PR, to the pressure of outsiders who keep nattering on about charging.

* It has forgotten its own lessons with TimesSelect sees amnesia as a strategy.

I think the risks are great and grave. The Times could have fought to become the preeminent news brand on earth, fighting it out with the BBC for that title. Instead, I fear, it will duck into its shell as the Washington Post has.

I already pay for The Times at home. I hope they would not charge me again. If they do, I will cancel the paper. If they charge me for using the paper more, I will use it less.** I will find other very good substitutes for much of what I get from it indeed, this will push me to discover and curate new sources. I will read what matters most to me from The Times and discover just how much that is a calculation the paper should not want to force me to make, not when there is so much new and good competition out there.

Clay Shirky has ridiculed micropayments, saying that we don't like being nickel-and-dimed. I'll ridicule metering, reminding those who contemplate it to remember what we think of meter maids. We curse them.

There is only one thing that can happen should The TImes put a meter on us. It will shrink.

** I should expand on this point. I would not use The Times less because I like it less, because I want to punish it. I love The Times. I read it every day. What I'm saying is that by metering, The Times will have me make a new economic decision every time I want to read a story: Is this unique content I will get only here (there is a good deal of that) or is this commodity information I can get elsewhere (BBC, Reuters, Washington Post, Politico, TechCrunch). The Times then restricts our relationship and it is in that relationship that it has to find value.

Shared by phillip
Makes sense.

The irony of the report that The New York Times is going to start metering readers and charging those who come back more often is this: They would would end up charging and, they should fear, sending away the readers who are worth the most while serving free those who are worth least.

That's according to the math of News Corp., which argues that readers who come via links from search and aggregators and bloggers and such are worthless because they're not local and they don't stay; they're one-click-wonders. The readers who come back again and again, the ones you know more about and can rely on and target better and build relationships with, goes this logic, are worth more. And News Corp. is also threatening to charge them.

So why charge your best customers? Why single them out? Why risk driving them away?

The logic eludes me. So do the economics.

I know, the argument is that these readers use the content more so they should be charged more. But that is based on the assumption that content is a consumable, a scarcity that drains the more it is read. Of course, it isn't. Content is, instead, a magnet that can create relationships of value; whether that happens is up to the creator of the content and the quality of service and relevance is gives. That, dare I repeat it, is the basis of the link economy.

But note the verb that started off the paragraph above: should. Readers who read more should pay more. This is the product of journalism's sense of entitlement.

So why would The Times charge? There are a few possible reasons:

* It has failed at advertising, as I said of News Corp. recently.

* Its costs are too high and rather than cutting them into a rational business, it desperately seeks some other revenue.

* It is falling prey to PR, to the pressure of outsiders who keep nattering on about charging.

* It has forgotten its own lessons with TimesSelect sees amnesia as a strategy.

I think the risks are great and grave. The Times could have fought to become the preeminent news brand on earth, fighting it out with the BBC for that title. Instead, I fear, it will duck into its shell as the Washington Post has.

I already pay for The Times at home. I hope they would not charge me again. If they do, I will cancel the paper. If they charge me for using the paper more, I will use it less. I will find other very good substitutes for much of what I get from it indeed, this will push me to discover and curate new sources. I will read what matters most to me from The Times and discover just how much that is a calculation the paper should not want to force me to make, not when there is so much new and good competition out there.

Clay Shirky has ridiculed micropayments, saying that we don't like being nickel-and-dimed. I'll ridicule metering, reminding those who contemplate it to remember what we think of meter maids. We curse them.

There is only one thing that can happen should The TImes put a meter on us. It will shrink.

Book: You Are Not a Gadget: A Manifesto

My colleague John Tierney wrote an interesting review of Jaron Lanier's new book, You Are Not a Gadget. Mr. Lanier has been a strong voice online since the early 1980s and helped popularized the term virtual reality. He was also an early champion of the open culture on the Internet.

There are two main themes to the book that Mr. Tierney covers in his review. One is the idea of paying for content online and integrating micropayments into the Web to allow a new economic model for content consumption. There is an interesting discussion about this topic over at the TierneyLab blog.

The other notion discussed in the review is Mr. Lanier's belief that the drive-by anonymity allowed by the Web has led to a mean mob mentality or as Mr. Tierney calls it, vicious pack behavior on blogs, forums and social networks.

Full piece at the NYT Bits blog

by Adam Thierer & Berin Szoka, Progress Snaphot 6.1

Stephanie Clifford of the New York Times posted a very interesting article this week summarizing a recent on-the-record chat the Times staff had with Federal Trade Commission (FTC) chairman Jon Leibowitz and FTC Bureau of Consumer Protection chief David Vladeck. The interview [discussed by Braden here] is profoundly important in that it reveals an alarming disconnect regarding the relationship between privacy regulation and the future of media, which were the subjects of their discussion with Times staff. Namely, Leibowitz and Vladeck apparently fail to appreciate how the delicate balance between commercial advertising and journalism is at risk precisely because of the sort of regulations they apparently are ready to adopt. Because the value of online advertising depends on data about its effectiveness and consumers' likely interests, and because advertising is indispensable to funding media, what's ultimately at stake here is nothing short of the future of press freedom.

The Day of Reckoning Is Upon Us

Leibowitz and Vladeck spend the first half of The Times interview wringing their hands about privacy policies, the declarations made by websites and advertising networks about their data collection and use practices (for which the FTC can and must hold them accountable). But the two feel that privacy policies don't adequately inform consumers. Chairman Leibowitz claims that online companies haven't given consumers effective notice, so they can make effective choices. And Mr. Vladeck states that advise-and-consent models depended on the fiction that people were meaningfully giving consent. But he and the FTC seem ready to abandon the notice and choice model because the literature is clear that few people read privacy policies, Vladeck told the Times. He and Leibowitz continue:

Philosophically, we wonder if we're moving to a post-disclosure era and what that would look like, Mr. Vladeck said. What's the substitute for it? He said the commission was still looking into the issue, but it hoped to have an answer by June or July, when it plans to publish a report on the subject. Mr. Leibowitz gave a hint as to what might be included: I have a sense, and it's still amorphous, that we might head toward opt-in, Mr. Leibowitz said.

This clearly foreshadows the regulatory endgame we have long suspected was coming. When the FTC released its Self-Regulatory Principles for Online Behavioral Advertising eleven months ago, we asked: What's the Harm & Where Are We Heading? Their answers to both questions have become clearer with each new calculated commentall apparently intended to slowly turn up the heat on the advertising industry so that the proverbial frog will stay in the pot until the water finally boils. Leibowitz's FTC has simply dodged the harm question with a four-part strategy:

1. Cobble together a record full of sympathy-evoking anecdotes submitted by advocates of regulation in comments and the FTC's ongoing Exploring Privacy Roundtables;
2. Let the most extreme Chicken Littles fulminate about the grand conspiracy of neuromarketing manipulation and the like (and sometimes even shout down FTC staff in panel discussions) in order to redefine the reasonable center of the debate;
3. Define-down harm as purely a matter of consumer expectations or consumers' dignity interests (whatever that vague and infinitely elastic term means); and
4. Attack the effectiveness of consent itself by suggesting that consumers cannot be trusted to understand privacy policies or be expected to make any effort to protect their own privacy.

Conveniently, this strategy leads right back to the day of reckoning Chairman Leibowitz threatened was coming last February: We are heading precisely where he told us we would beto full-on, opt-in regulation. The writing on the wall becomes more apparent every day: Leibowitz set out to bring online advertising to heel even before becoming Chairman, and his Commission is reprising almost precisely the same approach that led to the passage of the Children's Online Privacy Protection Act (COPPA) of 1998: building a case for new authority, dismissing industry self-regulation as ineffective, and finally presenting a report to Congress intended to produce a rapid legislative response. After the FTC presented its report on the need for regulation in congressional testimony in June 1998, it took Congress just four months to pass COPPAand much of that time was consumed by the summer recess. In short, Leibowitz is mounting a carefully choreographed campaign for increased regulation.

The only real question is whether Leibowitz will somehow try to use the FTC's existing authority over unfair or deceptive trade practices or wait for expanded authority from Congress. While most observers typically assume that such expanded authority would come in the form of a privacy-specific billbe it a broad baseline privacy bill or one specifically focused on online data collection for advertising purposesthe authority Leibowitz yearns for could just as easily come in the form of increased rulemaking authority as part of a broader bill that allows the FTC to preemptively regulate practices that are not deceptive but merely deemed unfair.

This would take the agency Back to the Futureto the late 1970s, when the agency reached the height of its efforts to regulate purely on unfairness grounds by trying to ban advertising to children. The agency's behavior earned it the moniker National Nanny from the Washington Post, hardly a bastion of regulatory skepticism.[1] That outpouring of popular resentment caused a heavily Democratic Congress to cut-off the Democratic-led agency's regular funding and prohibit it from regulating advertising merely on the grounds of unfairness. In essence, they told the agency to go back to its knitting and focus on protecting consumers from demonstrated harms.^[2] Duly chastened (and actually shut down for several days), the FTC formulated a meaningful legal standard for unfairness, which Congress codified in 1994: for a practice to be unfair, the injury it causes must be (1) substantial, (2) without offsetting benefits, and (3) one that consumers cannot reasonably avoid.

Under this statutory standard, as FTC Commissioner Thomas Rosch has argued, the commission must carefully consider:

[the] legitimate pro-consumer and pro-competitive benefits that result from [targeted advertising]. Absent hard data weighing these benefits against the limited invasion of privacy interests involved, it would seem difficult to conclude that treating that practice as an actionable violation of the unfairness prong of Section 5 will pass muster.[3]

So Leibowitz and Vladeck either need to get serious about weighing the costs and benefits of targeted advertisingor, in the absence of such actually measuring these trade-offs, get Congress to give them the authority to regulate. But one thing is clear from their past statements: they are in a hurry to do something. As Vladeck told The Times last August, There is a sense of urgency around here Consumers, I don't think are sufficiently protected under the current regime. Apparently, the case is closed in their minds.

Left Hand, Meet Right Hand

The second half of the Times interview concerns the future of news. Chairman Leibowitz is not optimistic:

There are some areas where you clearly see positive creative destruction, Mr. Leibowitz said, giving the example of travel agents who were replaced by Orbitz and other online-booking systems. The news, he said, was not one of those. When you're dealing with something as critical as news is to a democracy, you need to ensure, certainly, that it's independent, but also that it's vibrant going forward, he said. Areas like investigative reporting, foreign and domestic bureaus, and state-house reporting, he said, would likely falter under blog operations because of economies of scale.

He said he wasn't sure what the solution was, but threw out a few ideas discussed at the conference: maybe special tax treatment for newspapers, a Corporation for Public Broadcasting-like fund, or for the newspaper industry to charge fees for the re-use of its content, similar to the model that the American Society of Composers, Authors and Publishers uses. [emphasis added]

Mr. Chairman, with all due respect, haven't you forgotten about the solution that has powered private media for a few centuries in this country? You knowadvertising! Indeed, what's stunning about these comments is the complete disconnect with what Leibowitz and Vladeck said earlier in the interview. It certainly may be the case that they said more on the subject than what The Times has reported, but given their escalating rhetoric, it seems likely that significantly increased FTC regulation is on the horizon. And, yet, as Chairman Leibowitz marches us into this brave new world of regulating Internet media through their key funding source, he and Mr. Vladeck seem to have little appreciation of the vital role played by advertising in sustaining a truly free and vibrant press.

An Attack on Advertising Is an Attack on Media Itself

Let's step back and revisit Media Economics 101. Almost every serious scholar in the field acknowledges this truism: Advertising cross-subsidizes media platforms and the creation of valuable informationespecially news. Advertising is the mother's milk of all the mass media, Wall Street Journal technology columnist Walt Mossberg has noted. Similarly, Harold L. Vogel, author of Entertainment Industry Economics, the leading text in the field, has noted, Advertising is the key common ingredient in the tactics and strategies of all entertainment and media company business models. Indeed, it might further be said that advertising has substantively subsidized the production and delivery of news and entertainment throughout the last century.[4] Mossberg agrees and notes, Without ads, most editorial products and other programming would be either unavailable or prohibitively expensive.

The reason for the indispensability of advertising is simple: Information (including news and other forms of content) has public good characteristics that make it is very difficult (and occasionally impossible) for information-publishers to recoup their investments. Simply put, they quite literally lack pricing power: Whatever they charge, someone else will charge less for a close substitute, inevitably leading to free distribution of the content, even though the content is anything but free to produce. Advertising is the one business model that has traditionally saved the day by rewarding publishers for attracting the attention of an audience.

Which raises another under-appreciated point: Private advertising promotes press independence. Newspapers, magazines, radio, television, and many websites all receive their primary income from advertising, notes William F. Arens, author of Contemporary Advertising, another leading textbook in the field. This facilitates freedom of the press and promotes more complete information he concludes.[5] Why? Because, contrary to what some critics claim, advertising and marketing help keep private media providers independent of the need for taxpayer subsidies or private patrons. This begs an even more profound question: If not advertising, then what else?

A Public Option for the Press?

What's most troubling about Chairman Leibowitz's comments to the Times is that he has apparently found his alternative to advertising: a public option for the press! He mentions special tax treatment for newspapers or a new CPB-like fund (don't we already have one?) as two possibilities. That certainly will be music to the ears of radical, pro-regulatory activist groups like the ironically-named Free Press, which wants to see a massive public works program for the media sector.

Free Press recently filed comments with the FTC in the agency's recent workshop, Can Journalism Survive the Internet Age? and proposed a far-reaching industrial policy for saving the news. They call for over $50 billion in subsidies for the Corporation for Public Broadcasting and other bureaucracies, a journalism jobs program for that would be part of AmeriCorps, a variety of new tax incentives for struggling media operations or individuals who support favored institutions, and an assortment of government incentives to encourage local ownership and media divestiture (by handing over control to smaller operators or minority-owned groups). Ironically, Free Press has also floated the concept of a small tax on advertising as one way to pay for a press bailout.

The organization's founder Robert W. McChesney, the prolific neo-Marxist media scholar, penned an essay with John Nichols of The Nation last year, claiming that saving journalism essentially requires that media become an appendage of the State. Although advertising has supported journalism as a public good for centuries, the only way they can conceive to provide a public good is to socialize its means of production. Thus, journalism, like education and national defense, requires constant government oversight and support: A moment has arrived at which we must recognize the need to invest tax dollars to create and maintain news gathering, reporting and writing with the purpose of informing all our citizens. They ask us to consider the $60 billion in government spending they propose as a free press infrastructure project,' which would keep the press system alive.

Some in Congress seem willing to listen. The Senate has already held hearings about the future of journalism. And Senator Benjamin L. Cardin (D-MD) recently introduced what he has called the Newspaper Revitalization Act, which would allow newspapers to become nonprofit organizations in an effort to help them stay afloat. Importantly, however, the bill would also disallow political endorsements on newspaper editorial pageswhich, like campaign finance restrictions, would be a boon for incumbent politicians. That bill should serve as fair warning to journalists about the sort of strings lawmakers will attach to press-welfare efforts going forward. What other golden shackles might come with media subsidies?

To be clear, Chairman Leibowitz hasn't called for a complete press takeover along the lines of the Free Press plan. Yet, he hasn't answered a key question in this debate: Who pays for news? He appears ready to endorse a bold new regulatory scheme for the Internet and online media that, in the name of protecting privacy would put at risk the one traditionally successful method of supporting private media operationsadvertising. As the Pew Research Center's Project for Excellence in Journalism noted in its latest State of the News Media report, The problem facing American journalism is not fundamentally an audience problem or a credibility problem. It is a revenue problemthe decoupling of advertising from news. There's probably no way policymakers can stop this process, nor should they try. But they shouldn't be creating new obstacles to the survival of traditional media creators, either.

Unfortunately, that's exactly what Chairman Leibowitz's new regulatory scheme would do. The revenue delta between smart advertising (tailored to consumers' likely interests and measured for effectiveness in producing clicks, purchases, etc.) and dumb advertising (based purely on surrounding keywords or demographics of users presumed to visit the site) is difficult to measure but potentially enormouseven 10 times as great for some sites.[6] The difference between opt-in and opt-out could be nearly as dramatic, because it's difficult to get consumers to opt-in for anything, especially for small playerswhich means that opt-in regulation could, perversely, force consolidation in the online advertising and content markets. If the FTC cares about its statutory responsibility to safeguard competition, they should take this dynamic seriously and be hyper-cautious about heavy-handed mandates that could derail smarter advertising.

Finally, to be fair, in his interview, the Chairman also suggests the newspaper industry might want to find new way to charge fees for the re-use of its content. We're certainly not opposed to the notion and think that, if it could somehow be made to work (especially by removing antitrust obstacles), it could part of a diverse revenue mix for digital journalism. But, there's the rub. Micropayments inevitably face the problem of mental transaction costs that likely swamp the perceived value of most content and, like pay-walls, have generally worked only in media environments characterized by a scarcity of providers and a uniqueness of a sufficiently valuable product. These cold, hard economic realities are why advertising remains indispensable.

The Principled Alternative to Regulation

Convinced that privacy policies simply don't work, Leibowitz and Vladeck are asking what a post-disclosure era would look like. We appreciate the continued sensitivities expressed by certain groups and individuals about online privacy and data use more generally. But there is another way forward. We have proposed the following 5-E layered approach to concerns about online privacy, focusing on restraining government access to data as a clear harm, rather than crippling the private sector uses of data that directly benefit consumers:

1. Erect a higher Wall of Separation between Web and State by increasing Americans' protection from government access to their personal datathus bringing the Fourth Amendment into the Digital Age.
2. Educate users about privacy risks and data management in general as well as specific practices and policies for safer computing.
3. Empower users to implement their privacy preferences in specific contexts as easily as possible.
4. Enhance self-regulation by industry sectors and companies to integrate with user education and empowerment.
5. Enforce existing laws against unfair and deceptive trade practices as well as state privacy tort laws.

Such a layered approach would not only be a less restrictive alternative to top-down, one-size-fits-all government regulation, but also potentially more effective in key respects than government data use/collection mandates. In an ideal world, adults would be fully empowered to tailor privacy decisions, like speech decisions, to their own values and preferences (household standards). Consumers would have (1) the information necessary to make informed decisions and (2) the tools and methods necessary to act upon that information. Importantly, those tools and methods would give them the ability to block the things they don't likeannoying ads or the collection of data about them, as well as objectionable contentwhile also helping them find the information and content they desire.

But of course, the devil's in the details. Leibowitz and Vladeck would set the bar so high as to what constitutes effective consumer choice that current privacy policies necessarily fail their testif only because most users don't care enough to make the right privacy choices. Privacy policies, even if read by relatively few consumers, nonetheless allow privacy advocates, journalists and watchdog-bloggers to scrutinize what companies say they're doingpromises to which the FTC should hold companies stringently. That's clearly not good enough for Leibowitz and Vladeck, who want to give up on notice and choice and move on to opt-in mandates. But why not first try to make notice more effective? The advertising industry is currently developing standardized interfaces that could communicate key information about privacy practices in a single icon, label or other easily-digested consumer touch point.

More radically, why focus on tinkering with consumer interfaces, when standardized data disclosure formats like the Protocol for Privacy Preferences (P3P) could distill legalistic privacy policies into machine-readable code? Such disclosures could provide a powerful form of notice that the ordinary consumer could use: simply setting their own privacy preferences in a browser tool that automatically implements those preferences by blocking tracking that users object to. Such a privacy disclosure format could also allow the FTC to automate enforcement of its existing authority to punish unfair or deceptive trade practices.

Conclusion

And so we return to the question the FTC asked in its recent workshop, Can Journalism Survive the Internet Age? Answer: Not if the FTC kills the golden goose that lays the golden eggs through onerous advertising regulations and data controls in the name of privacy. Chairman Leibowitz and Bureau Chief Vladeck shouldn't foreclose the possibility that advertising can play a central role in the future of a free press in the Digital Agejust as it has done historically in the United States. Indeed, they would be wise to remember that advertising has always been with us. As the Supreme Court noted in its 1996 decision, 44 Liquormart, Inc. v. Rhode Island.

Advertising has been a part of our culture throughout our history. Even in colonial days, the public relied on commercial speech for vital information about the market. Early newspapers displayed advertisements for goods and services on their front pages, and town criers called out prices in public squares. Indeed, commercial messages played such a central role in public life prior to the founding that Benjamin Franklin authored his early defense of a free press in support of his decision to print, of all things, an advertisement for voyages to Barbados.[7]

Of course, for advertising to continue to play the role as sustainer of the press, it must be allowed to evolve. Media operatorslarge and small alikemust be allowed to craft new strategies, some of which may require data collection and marketing practices that will make some privacy-sensitive users uncomfortable, but will also ensure that the goose keeps on laying golden eggs for them and everyone else.

While Chairman Leibowitz may decry the creative destruction at work in the news sector and information industries today, that shakeup will continue and, no doubt, be painful for incumbent players. Advertising alone may not save the day for media as it has in the past, but it will likely remain essential to sustaining private media platforms and providers going forwardif federal policymakers allow it. The alternativemassive government intervention into the news and media sectorsis too horrifying to think about.

[1] Washington Post, March 1, 1978.

[2] Congress terminated the FTC's efforts to prohibit advertising to children, and barred the agency from issuing any advertising regulation predicated solely on unfairness for three years. FTC Improvements Act, Pub. L. No. 96-252, 11 (May 1980). See generally J. Howard Beales, Director of the Bureau of Consumer Protection, Federal Trade Commission, The FTC's Use of Unfairness Authority: Its Rise, Fall, and Resurrection, www.ftc.gov/speeches/beales/unfair0603.shtm.

[3] Thomas Rosch, Some Reflections on the Future of the Internet: Net Neutrality, Online Behavioral Advertising, and Health Information Technology, Remarks at U.S. Chamber of Commerce Telecommunications & E-Commerce Committee Fall Meeting, October 26, 2009, 13, www.ftc.gov/speeches/rosch/091026chamber.pdf.

[4] Harold L. Vogel, Entertainment Industry Economics (Cambridge, MA: Cambridge University Press, 7th Edition, 2007), at 46.

[5] William F. Arens, Contemporary Advertising (McGraw-Hill Irwin, 10^th Ed., 2006) at 50.

[6] See Berin Szoka & Mark Adams, The Benefits of Online Advertising & Costs of Privacy Regulation, PFF Working Paper, Nov. 8, 2009, www.scribd.com/doc/22445754/Benefits-of-Online-Advertising-Paper.

[7] 517 U.S. 484, 495 (1996), http://www.law.cornell.edu/supct/html/94-1140.ZO.html

______________________________

Related PFF Publications

• Privacy Trade-Offs: How Further Regulation Could Diminish Consumer Choice, Raise Prices, Quash Digital Innovation & Curtail Free Speech, Berin Szoka, Comments to the Federal Trade Commission Exploring Privacy Roundtable, November 10, 2009.
• Online Advertising & User Privacy: Principles to Guide the Debate, Berin Szoka & Adam Thierer, Progress Snapshot 4.19, Sept. 2008.
• Targeted Online Advertising: What's the Harm & Where Are We Heading?, Berin Szoka & Adam Thierer, Progress on Point 16.2, April 2009.
• Privacy Polls v. Real-World Trade-Offs, Berin Szoka, Progress Snapshot 5.10, Oct. 2009.
• The Benefits of Online Advertising & Costs of Privacy Regulation, Berin Szoka & Mark Adams, PFF Working Paper, Nov. 8, 2009.
• Benefits of Online Advertising, Berin Szoka, Mark Adams, Howard Beales, Thomas Lenard & Jules Polonetsky, PFF Capitol Briefing, July 2009.
• Public Option for Press Should Get the Red Pen, Adam Thierer, The Daily Caller, Jan. 12, 2010.

• Lanier falsely believes in the idea of "lock-in" with technology (the claim that the VCR beat Betamax despite being worse and that QWERTY beat Dvorak despite being worse due to "lock-in") is why the internet is so screwed up today. Except, of course the classic examples of lock-in were shown years ago to be false. The VCR beat Betamax because it was better at what people wanted (the ability to record a lot on a single tape). QWERTY is no worse than Dvorak.
• Lanier pulls out Nick Carr's tired and silly claim that people doing user-generated content are "sharecroppers." This ignores that the whole reason they use those sites is that they get value in return. It fails to realize the non-monetary reasons why people use those sites.
• Lanier thinks that the "answer" to file sharing online is to rearchitect the internet for micropayments. Again, this shows a fundamental misunderstanding of both economics and psychology. People hate micropayments and they're incredibly inefficient from an economic standpoint. It also shrinks the market of ideas and holds back communication.
• Lanier argues that the market for "creative people" is shrinking. Apparently he hasn't read any of the recent studies that have shown that every aspect of the music business has grown -- except for the business selling plastic discs.
• Most amusing of all, he argues that "artificial scarcities... allow the economy to function." He even admits that they are artificial scarcities, but still thinks they're a good thing. Again, this seems to be a fundamental misunderstanding of economics. It's hard to talk logically to someone who thinks that having less of a resource is somehow good for the economy.

While compiling this list, I asked a few people a dumb question: What was the biggest online event of the year?

Random answers included Oprah joining Twitter, Michael Jackson's death breaking on TMZ, and Susan Boyle coming and going. Someone even tried to argue that a writer who detailed his firing from The New Yorker on Twitter was momentous.

Sigh.

But frankly, I've got nothing better. So try this out: Matt Haughey selling PVR Blog on eBay for $12k was the most emblematic online event of 2009. Why? Because the amount seems both ridiculously high and preposterously low at the same time. It proved that if there was ever a time when you couldn't tell what the fuck something was worth, this was it.

With Kim Kardashian making $10k per tweet, even internet fame seemed synchronously bankrupt and filthy rich. Or as someone else asked, how didn't we notice that Perez Hilton had accidentally become more famous than his namesake Paris? And how is it possible that more people are reading Reblogging Julia than Julia herself?

So it's time to stop being wishy-washy about our value assessments. A few years ago, someone convinced me to drop the title "Best Blogs" from this annual list and change it to "Most Notable" blogs of the year. It made sense at the time, when the medium was still figuring itself out: chiefs were being chosen, voice still being refined. But as I began to assemble this year's list, it became clear that, no, these blogs actually were my favorites, not merely the most interesting.

So here they are, the 30 Best Blogs of 2009:

[Previous years: 2002 | 2003 | 2004 | 2006 | 2007 | 2008.]

30) Dustin Curtis
Woe, the personal blog. It's a small tragedy that the decade began with the medium being used primarily by single individuals to gather and share small insights, but ends with the impersonal likes of Mashable and HuffPo. In the age of more more more, it's remarkable to see someone dedicate so much time to a single post, making sure the pixels are aligned and the words are all just right. Dustin Curtis' personal site is one of the dying breed of personal bloggers who care about such things (similar to how Jason Santa Maria puts art direction into every one of his posts). Start with: The Incompetence of American Airlines & the Fate of Mr. X. (See also: Topherchris, We Love You So, A Continuous Lean, and Clients From Hell.)

29) NYT Pick
The bloggers behind NYTPicker had quite a year: they got Maureen Dowd to admit to plagiarism, they pointed out several errors in the Times obituary of Walter Cronkite, and Times contributor David Blum was revealed and then un-revealed as one of them. In the process, they showed that blogs can comment on the New York Times in a more substantial way than making fun of silly Sunday Styles trend pieces. If anyone really still thought blogs couldn't be the home of original reporting and research, NYTPicker proved them wrong. They watch the watchdogs! Just wait for an enterprising blogger to start NYTPickerPicker in 2010.

28) Gotcha Media
Every year it seems like a site should emerge to take the video aggregator trophy, but the space is still a hodgepodge of sporadically embedded YouTube clips. Gotcha Media was the closest to the quintessential destination for finding video events we remembered through the year, whether that be Kanye crying on Leno or Michele Bachmann leading a anti-health care prayercast. (See also: Gawker TV and Mag.ma.)

27) Animal
As Virginia Heffernan recently asked in a recent NYT essay, what exactly should a magazine look like in the digital age? Once a sporadic print title, Animal is now one of the last remaining examples of what an underground magazine could look like online. (See also: Black Book Tumblr and Scallywag & Vagabond.)

26) Shit My Dad Says
Several people tried to convince me to change this entire list to "Best Twitterers of the Year," a listicle that someone probably should compile but which exceeds my pain threshold. In the meantime: "Son, no one gives a shit about all the things your cell phone does. You didn't invent it, you just bought it. Anybody can do that."

25) The Rumpus
As literary magazines go, The Rumpus is something of a mess. Created by Stephen Elliott, who spent most of the year jostling around the country in support of his novel, The Rumpus defined itself mostly in opposition to what it is not. But columns by Rick Moody and Jerry Stahl, along with a rambling assemblage of interviews, links, anecdotes, reviews, and whatever fits onto the screen, make it the best case going for a reinvented online literary scene. (See also: HTML Giant, The Millions, Electric Literature, and London Review of Books Blog.)

24) Best of Wikipedia
...Coprolalia, Foreign Accent Syndrome, Stendhal Syndrome, Dude, Mopery, Sokushinbutsu, Tyvek, Shm-reduplication, Soap Opera Rapid Aging Syndrome, Pica, Kayfabe... (See also: Double Tongued.)

23) WSJ Speakeasy
It didn't start off very well. In the backdrop of the Wall Street Journal announcing Speakeasy in June was the chatter about Rupert turning the internet into a clunky vending machine (put a quarter in, junk food drops out). And the coverage at this culture blog was spotty at first, but the gentility eventually morphed into a more conversational aesthetic. (See also: NYT Opinionator.)

22) Script Shadow
"I was just thinking what an interesting concept it is to eliminate the writer from the artistic process," said Tim Robbins' cocky producer character in The Player in 1992, and Hollywood seems to have listened. By reviewing movie scripts before they get made into movies, this site turns the focus back onto the written word. (See also: First Showing, Movie of the Day, and Go Into The Story.)

21) Newsweek Tumblr
It isn't enough that Newsweek is the only mainstream media organization dangling their toes in the rocky stream of Tumblrland; it also happens to be doing it better than most of the kids. (NYTimes.com has been threatening to do "something interesting" with the medium for a couple months, but there's still nothing to show for it.) It's tricky for an established old media company to find the right voice on a new platform, but the Newsweek Tumblr has figured out how to mix their own relevant stories with the reblog culture. (See also: Today Show Tumblr.)

20) Asian Poses
The Nyan Nyan. The Bang! The V-Sign. The Shush. These are just some of the poses Asian Poses introduced us to this year, illustrated by photos of cute Asian ladies. Is it offensive? Maybe, but many of the most interesting blogs straddle that offensive/not-offensive line. Also, based on the well-known "members of a group can make fun of that group and you can't" rule of comedy, this is not offensive since it is run by a Chinese guy. But maybe it objectifies women! Color me confused-pose. (See also: Stop Making That Duckface, This Is Why You're Fat, Really Cute Asians, and Awkward Family Photos.)

19) Look At This Fucking Hipster
If you thought the Internet had run out of ways to mock hipsters, Look At This Fucking Hipster and Hipster Runoff proved you wrong this year. Look At This Fucking Hipster took the more direct approach, simply asking you to look at photos of these fucking hipsters, complete with caustic one-line captions. It may come as no surprise that the author, Joe Mande, appears to be a self-loathing hipster, posing in black-rimmed glasses and a flannel shirt on his website. Literary-minded hipsters are surely jealous of LATFH's book deal.

18) Hipster Runoff
Hipster Runoff's Carles took a more satirical approach, blogging about pressing hipster issues such as the music meme economy and whether you should do blow off your iPhone in fractured, "ironic quote-heavy" txt-speak. Many people suspected that "Carles" was actually Tao Lin, since Carles' writing was so similar to Lin's affectless prose, but Lin denies this. Whoever Carles is, he is most certainly another self-loathing hipster. He knows far too much about Animal Collective to be a civilian.

17) Reddit
There's a long-standing joke on this annual list to mention Metafilter every single time. But this was the first year it seemed that more people were paying attention to what was going on in the conversation threads on Reddit. For the uninitiated: Reddit takes some of the features of Digg, mixes it with the aesthetic of Twitter, adds the editorial of Fark, and accentuates it with the comments of Metafilter. But better than that sounds.

16) Smart Football
If you had told me at the beginning of 2009 that Steve Pinker and Malcolm Gladwell would get into a heated debate about football esoterica, and that this debate would happen, in all places, within an internet comment thread, I would have said, "Yeah, and Brett Favre will have the best season of his life at 40." But every once in a while intellectuals wander into sports, and recently the NFL seemed the place where the Chronicle of Higher Ed crowd is hanging. So if you want to get smart about football, this is the place to do it. (See also: Deadspin and The Sports Section.)

15) Information Is Beautiful
Is it? Yes, but only in the hands of those who know its power. (See also: Infosthetics, Data Blog, and NYT Bits Blog.)

14) Snarkmarket
It looks like a conspiracy that Snarkmarket has made this list a few times now, but unlike most blogs that become sedentary in their success, it just keeps innovating. This year, Robin Sloan quit his job at Current TV to become (among other things) a fiction writer -- and one of the most fascinating ones on the scene in some time. Matt Thompson had been gigging at the Knight Foundation, but recently hopped to a new gig at NPR. With them being so busy, Tim Carmody settled in as the new scribe of ideas. If they let me give it a tagline, it would be "The BoingBoing it's okay to like." (See also: Hey, It's Noah and Waxy.)

13) Nieman Journalism Lab
Where were these guys when we needed them? Sure, it's another think tank, but Nieman Journalism Lab has been putting its not-for-profit money where its mouth is by also breaking news, such as the item about Google developing a micropayments sytem, the crack-ass idea from the Associated Press to game search, and little factoids like NYT's most frequently looked-up words. It also happens to be the only place still hiring journalists. (See also: Reflections of a Newsosaur and Newspaper Death Watch.)

12) Anil Dash
At some point during the year, I asked Anil for an explanation in the upsurge of blog posts on his site. He said it was merely recognizing an opening: there are so few people writing intelligently about technology today. True! Daring Fireball may have the links, and TechCrunch may have the coverage, but there are scant intellectuals left in the space. When it was announced last month that he was leaving Six Apart to work for a new government tech startup within the Obama administration, the techno-pragmatism all made sense. (See also: Obama Foodorama.)

11) Slaughterhouse 90210
Slaughterhouse 90210 combined lowbrow TV screencaps with highbrow literary quotes, making it kind of the Reese's Peanut Butter Cups of Tumblr blogs. Another comparison: an intellectual I Can Has Cheezburger. Seeing a quote from, say, The Bell Jar underneath a Friends screencap is pleasantly shocking -- especially after you realize the quote fits the show perfectly -- and a reassurance that it's okay for smart people to like stupid things. Could be a good candidate for a book deal, if it weren't for those pesky copyright issues. (See also: The G Maniesto and Fuck Yeah Subtitles.)

10) Letters of Note
We've known for a while that the best blogs are dedicated to a precise nano-topic, but there is also a new thread emerging: the blog dedicated to disappearing technologies. The tagline of Letters of Note, "Correspondence deserving a wider audience," says it all. There's Hunter S. Thompson starting a screed "Okay you lazy bitch," there's Kurt Vonnegut writing his family from Slaughterhouse Five, there's the letter from Mick Jagger asking Andy Warhol to design album cover art, and there's J. D. Salinger's hand-written note aggressively yet delightfully shooting down a producer who wants to turn Catcher in the Rye into a movie. (See also: Significant Objects, Iconic Photos, and Unconsumption.)

9) Mediaite
Launching another media blog didn't sound like rearranging Titanic deck chairs; it sounded like booking a flight on Al Quada Airlines to Jerusalem. But not even six months after launching, Mediaite was already on the Technorati 100, eventually landing somewhere around #30 on a list of players who have been there for years. Sure, it can go a little bananas with the seo/pageview bait, but it's also one of the few entities in the whole bastardly New York Media Scene to actually have the will to take on Gawker (or its pseudo-sibling, The Awl). (See also: Web Newser and Politics Daily.)

8) Clay Shirky
There were only, what, a dozen or so essays on his blog this year? But one of them, Newspapers and Thinking the Unthinkable, caused such a little earthquake in the industry that tremors were still echoing months later. Shirky is the only guy in the whole space who doesn't sound like he has an agenda, who doesn't have a consulting agency on the side that he's pumping his half-baked theories into. (See also: Umair Haque and The Technium.)

7) OK Cupid: OK Trends
Even the breeders in the crowd will be fascinated by the data porn on display here. (See also: Music Machinery.)

6) Harper's Studio
The book industry is about to go through the same disruptive changes that the music industry set upon a decade ago -- this, it seems, almost everyone agrees upon. But just as with the previous natural cultural disaster, no one is sure how to prepare for the earthquake. The editors at the new Harper Studio are the most likely candidates for turning all the theory behind "the future of books" into actual functional products. An impressive list of inventive works on the horizon hints at their agenda, but the blog, which is something of a clearing house for discussing everything that has to do with the future of publishing, is like an R&D lab for print. (See also: Omnivoracious, The Second Pass, The Penguin Blog, and Tomorrow Museum.)

5) Eat Me Daily
As one competing food blogger put it to me, Eat Me Daily is the Kottke of food blogs. Which, if you want to follow that obtuse metaphor, makes Eater the genre's Gawker and Serious Eats its Engadget. And which, if you understand any of that at all, means that this blurb can end now. (See also: Eater and Serious Eats.)

4) Mad Men Footnotes
As I wrote earlier, Mad Men Footnotes revived the moribund genre known as tv recaps.

3) TV Tropes
If you don't know TV Tropes, it's too bad, because I probably just ruined your life. If you've ever recognized a hackneyed plot device on a tv show and thought "I wonder if anyone else has thought of this," the answer is: yes, a lot. I don't even know where to suggest starting in this labyrinth, but try entries like Butterfly of Doom or Chekhov's Gunman or Bitch In Sheep's Clothing -- or just hit the random item generator. My dream is to have Tarantino spend a month here and come out with his Twin Peaks. (See also: Television Without Pity and Urban Dictionary.)

2) The Awl
The Awl is too good to exist, or so goes much of the catty banter in the media business scene. There is seldom a conversation of The Awl lately that doesn't ask, "How the hell will they make money?" But let's set aside that gaudy little question for a second and instead ask, "Why has The Awl become an internet love object?" I've done the math, and I have a theory, involving at least two factors: 1) It winks at all the sad internet conventions while both debunking and adopting them at the same time (Listicles Without Commentary and those Tom Scoccha chats are the best example). And 2) it is willing to go to bat for the unexpected without sounding like one of those intentionally counter-intuitive Slate essays (Avatar and Garrison Keillor are two good recent examples). In short, it's just less dumb than everything else. Even Nick Denton joked about it at launch, and I don't know how they'll survive either, but The Awl already exists in an admirable pantheon that includes Spy and Suck. (See also: Kottke and Katie Bakes.)

1) 4chan
Go ahead, scoff. But I will tell you this: no site in the past year has better personified the internet in all its complex contradictions than 4chan. Blisteringly violent yet irrepressibly creative, vociferously political yet erratic in agenda, 4chan was the multi-headed monster that got you off, got you pissed off, and maybe got you knocked out. When I interviewed moot in February, I discovered a smart kid who had seen more by the age of 16 than someone who actually lived inside all six Saw movies. People tend to think of 4chan as pure id, but there are highly formalized rules (written and unwritten) within the community. Inside all the blustery fury of the /b/tards, there is more going on psychologically than we are equipped to understand yet. (See also: Uncyclopedia, Encyclopedia Dramatica, and Know Your Meme.)

Special thanks to these exceptionally nice people for contributing ideas to this list: Caroline McCarthy, Joanne McNeil, Melissa Maerz, Chuck Klosterman, Soraya Darabi, Mat Honan, Katie Baker, Erin Carlson, Noah Brier, Jason Kottke, Taylor Carik, Nick Douglas, Lockhart Steele, Matt Thompson, Anastasia Friscia, and Kelly Reeves.

Newspapers and traditional media have seen their world and their business models crumble before their very eyes. Newspaper revenues have plummeted by nearly 30% in the last year alone, while newspaper circulation numbers are in the toilet. The web is destroying outdated business models and replacing them with more efficient ones.

These newspaper and media companies aren't just letting themselves get destroyed, though. Some have gone web-only, some are embracing social media, and then some are blaming Google.

When we first heard that Rupert Murdoch intended to remove News Corp websites from Google, we weren't impressed. We didn't understand his plan, but we did believe that it wouldn't work.

Then This Google Thing Got Out of Hand

That was, until we learned that Microsoft and News Corp are in discussions to remove content from Google and that most recently, other newspapers and media companies are considering joining Murdoch's insanity.

Let's think about this: in a few months, the Wall Street Journal, the New York Post, and most of the 56 daily newspapers of MediaNews Group could be de-indexed from Google and Google News(and in News Corp's case, displayed prominently on Bing).

Experian Hitwise explored yesterday what would happen if this plan comes to fruition. As the following graph demonstrates, Google alone accounts for 20+ percent of newspaper traffic:

Some of that traffic would remain intact (we really doubt Murdoch would remove the homepage of the Wall Street Journal from Google, thus searches for the WSJ in general would remain unaffected), but overall it'd be a devastating traffic blow. Google is still the main method of information discovery online, and that trend will only grow as more kids turn to Google instead of the $0.75 daily.

In short: Rupert's plan will gut his company and doesn't set News Corp up for the future.

Rupert, We Understand Your Dilemma

Let's give News Corp some leeway and a little credit though: they know that the old business models are dying and that they have to do something. Even back in August, we stated that good journalism isn't cheap and that we have to find a better way to compensate media organizations for their work. Here is what we said about his plan to put his websites behind a paywall, with key points bolded:

Murdoch has essentially declared that the free-for-all in online news has ended. Specifically, he states that good journalism isn't cheap (that's true) and that, while the web has made distribution cheap, it has not made it free. He also hopes to gain more revenue from major celebrity scoops from his tabloid papers (i.e. the Sun). His bet is that people will indeed pay for news content.:

The next paragraph explains our arguments, though:

We're not so sure. While we don't disagree with the need to find additional revenue streams for newspapers and quality journalism, we think there are plenty of alternative news resources to turn to. Murdoch must see something encouraging at the WSJ, because he wouldn't be going with this plan if he didn't think they could replicate that model without losing significant readership.

Sorry Rupert, but newspapers aren't going to increase anytime soon and up-and-coming blogs and media companies aren't going away. Maybe we were wrong about you seeing something in the WSJ model. Maybe you just don't understand how media has been fundamentally altered by the web.

This Isn't the Future of Media, Murdoch

We've had enough. Murdoch's plan to de-index from Google is getting out of control, and it threatens to speed up the destruction of all traditional media. If other newspapers decide to join this insanity, here's what will happen: more efficient organizations will step in to fill the gaps. There is no shortage of lean and socially savvy media organizations built in the last five years.

The future of media isn't in The Wall Street Journal, no matter how much value it provides society. No, the future is in the web, fast-paced blogs, and social media. The future is in companies that realize that news a day old is, well, a day old. The future is in information discovery, not in hiding content.

We know your empire is not doing so well, Murdoch, but that doesn't excuse you from taking your company down a path that will take you into oblivion. No Microsoft deal will fix the inherent problems with the newspaper business model.

What News Corp should be doing instead: Finding more efficient means of distribution, leveraging its revenue-generating assets, exploring new methods of payments, and encouraging innovation. We're not psychics or high-profile consultants, but we know which models are winning and which ones are not.

In short, Murdoch, take your ball and go home. Your plan can only hurt News Corp.

Tags: bing, Google, microsoft, Murdoch, News Corp, rupert murdoch

By Senior Editor Kris Smith (@croncast)

The gadgets are flowing and they've got both publishers and subscribers in a tizzy over their options. Are they 3g? Can I put my content on it? Just wifi? What services do they deliver? Do I need to build an app? Am I locked in?

All great questions but not the one that is at the front of my mind. That question being where is the personal media hub for all of this content? Each type of media that we consume has a disparative quality of some sort that requires another gadget or format transcoder to allow usage which means, users need a hub.

I just want to know where that hub will be. I'm not sure if it belongs in the cloud or can even exist there due to limitations placed on that content by rights holders. Which is a legitimate reason not to use the cloud since publishers need to eat.

A couple reasons to use the cloud would be transfer speeds, remote accessibility and backups. With increased gadget connectivity it would make sense to do this. An example of a gadget that needs to be fed from an outside source like the cloud is the PSPgo. It relies on connectivity to fetch games, video and browse the web.

The games on PSPgo arrive from a Sony controlled hub behind a firewall. If the cloud is too limiting due to rights management the other other solution would be to offer a private hub. Another gadget, but one that resides in the dwelling of an individual. Using the Sony model for control and privacy a device like this could be the next evolution of an inclusive hub. It seems to me to be the missing link.

Media management across multiples platforms and for varying devices would require some version of a standard protocol. The protocol probably already exists and could be as simple as HTTP with SSL. The device itself a web server that connects to cars, phones, tablets, computers, televisions, etc.

A device like this could also create new opportunities for rights holders to create new models for selling content. I'm thinking in the range of micropayments for ongoing usage or payments for amount of time used. An example would be a movie that instead of a 24 hour limit would allow the consumer to view it 2 times on any device before being crippled or offered for purchase for an additional few dollars.

My personal interest would be to have a media hub that I had control over and could add content to from any device like the PSPgo, Kindle, iPhone or computer. The ability for these devices to speak a common language for file storage and retrieval would increase consumption and sales as all of a users purchases become portable, even if lockedin to a device.

There are plenty of media hubs that exist today for personal use that can be net connected, but this device would find its niche in storing and delivering content without limitation.

DISCLOSURE OF MATERIAL CONNECTION: http://cmp.ly/0

Where is the personal media hub for ebooks, music and videos? is a post from: TechStartups.com

Digg CEO Jay Adelson told FOX Business tonight that ever since rolling out Digg Ads, the social link-sharing service has been making money and that profitability is right around the corner.

Although advertising continues to be the only seemingly reliable model for monetizing content-centric websites, Adelson reports that click-through rates are higher than expected. That being said, typical rates for online advertising are generally abysmal, so if Digg's ads are working better than most, good for them, and let's all study their model. Read - and watch - for the rest of the story on how Digg has grown and will continue to expand and monetize.

Sponsor

The FOX interviewer asked Adelson if micropayments were considered as a monetization option, "I think that micropayments is interesting," he replied. "I think that if it works though - the level that it's going to work is between somebody like Digg and the newspaper, as opposed to necessarly expecting that consumer to subscribe to some sort of micropayment system."

This sort of talk would surely come as good news to Rupert Murdoch, who was referenced in the interview and has stated plans to charge search engines - and perhaps aggregators - that index and share snippets of the relevant, timely, and expensive content that traditional news outlets still struggle to integrate with modern Internet-enabled user behavior.

What about selling anonymized, aggregate user data? Adelson says he doesn't want to sell that information unless users are generally cool with the idea. "I think that users are pretty sensitive now; they're pretty savvy and they understand the idea that they have to be private." But data on trends and user attention - data that would be highly valuable for old media to have and that might actually contribute to a better user experience - might be more in line with what Digg execs are willing and able to sell.

And what about the possibility of an IPO? Hold onto your hats, day traders. Adelson says that, while he feels he owes it to investors and employees to "go public at some point," he's waiting for two factors: A valuation he likes and the day that Digg needs "hundreds of millions of dollars for something." In other words, we're not shaking the quarters out of our piggy banks just yet.

So, what is coming next for Digg? It seems the company is planning to follow in Twitter's footsteps and release international versions of the site. "About 40% of our traffic comes from international, but we have no other languages on Digg right now, so why not go there," said Adelson.

Check out the whole interview below:

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In the past year, we've seen a palpable shift from newspaper and magazine publishers with regard to paid contentwhile they still don't know how to make paid content work, they know they want to try. A recent report from the American Press Institute underscores this trend: The API reports that 60% of newspaper executives say they're considering paid content options, even though currently 90% don't charge for any content online.

Consumers, though, have different ideas. In a new Forrester report, we find that most consumers (80%) say they wouldn't bother to access newspaper and magazine content online if it were no longer free (no surprise), and the rest are split about how they'd like to pay for content:

It's especially notable that, while publishers talk about micropayments so much you could design a drinking game around the word, only 3% of consumers say they'd prefer this method of payment for newspaper and magazine content.

This data suggests two things:

1. Publishers should continue to offer free, ad-supported products to the 80% of consumers who won't pay for content online; and
2. Publishers should offer consumers a choice of multichannel subscriptions, single-channel subscriptions, and micropayments for premium product access.

But one size won't fit all consumers want choice. The need for a multichannel product and pricing strategy is further reinforced by the what if scenario of print being discontinued. When we asked consumers, If the publications you read were no longer available in print, how would you prefer to access that content? we found that no single channel dominated responses.

Thirty-seven percent of U,S. consumers say they'd prefer to access content on a Web site, and smaller percentages say they'd prefer access via portable devices like mobile phones (14%), laptops and netbooks (11%), or eReaders like the Amazon Kindle (3%). Notably, 10% say they'd prefer the anachronistic solution of PDF by email.

Again, this points to the need for publishers to provide consumers with choice: There's no one delivery platform, and no one pricing model, that will satisfy all consumers. Consumer willingness to pay is so modest and, in general, we find it tends to over-report in surveys that publishers need to be extremely flexible to accommodate the needs of these precious customers.

Sarah Rotman Epps is an Analyst at Forrester Research, where he serves Consumer Product Strategy professionals and contributes to the Forrester blog for that role.

Newspapers continue to struggle with finding an economically viable and sustainable business model for the production and distribution of news on the Web, and not a day passes without me reading about some idiotic statement about the future of online news or journalism made by someone in charge of something at one of the world's beleaguered newspaper and/or magazine publishers.

Today we have James Harding, editor of News Corp-owned The Times, giving some insight into the publisher's plans to generate revenue from the digital edition of the paper to an audience of senior editors and executives at the Society of Editors conference in Essex, per PaidContent.

The plans? To charge for 24-hour access to the digital version of the daily newspaper in combination with a subscription-fee based model.

Seriously, Harding apparently said he believed charging for a full day's access to online news you can and will continue to be able to essentially get for free elsewhere is a good idea. Pledging to rewrite the economics of newspapers, I can't help but wonder how he wouldn't expect such a stupid endeavor to rewrite nothing but the economics of The Times exclusively.

And not in a good way.

Paywall brouhaha aside, I figured everyone realized by now that people tend to cherry pick news content online based on their time and specific interests, and that there was quite some agreement around the fact that people vote with their wallets when given more individual choice (e.g. evolution of music album sales vs. single track sales). If you could choose between paying per single music stream rather than spend your money on 24-hour access to an entire album, which would it be?

Even if you still go out and buy the news as printed on actual paper and subsequently read every single article in it, how many people are like you, you reckon? And if you wanna read everything and everyone a daily newspaper has to offer anyway, why not just, erm, continue to buy the newspaper instead of paying for time-limited access to the digital version of it? Because the advertising alongside articles in the latter case is more interactive?

Despite clear indications of the contrary, Harding believes people will be prepared to pay for news, citing the 270 million books purchased annually in Britain as evidence of an enormous appetite for the written word and for news. Except of course you usually pay for a book only once in your life and it (hopefully) stays relevant for the rest of it, while a newspaper by definition stops being a vehicle for actual news the very moment it gets printed.

At least Harding and I agree that micro-payments are not the way either he claims newspapers should be wary of article-only economics because they could find themselves writing a lot more about Britney Spears and a lot less about Tamils in northern Sri Lanka.

An excerpt from the MediaGuardian article:

From spring of next year we will start charging for the digital edition of the Times. We're working on the exact pricing model, but we'd charge for a day's paper, for a 24-hour sign-up to the Times. We'll also establish a subscription price as well.

The paper's recent decision to end the free distribution of bulk copies was in line with this strategy, he said.

We think it's good for us and good for business to stop encouraging the trickery and fakery of the ABCs. We want real sales to real customers that's what our advertisers want too.

There's not a doubt in my mind that that's indeed what The Times wants and hopes for.

There's even less doubt in my mind that this is not what readers want, though.

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According to a new Forrester survey, almost 80% of Internet users in the US and Canada would not pay for access to newspaper and magazine websites. Those users who would consider paying for content are mostly interested in subscriptions. Only a small minority of consumers (3%) is interested in making micropayments. The study also asked which distribution channel consumers would prefer if their favorite publications ceased to exist in print. 37% preferred the web, 14% mobile phones and 11% would prefer to read the content on their laptops or netbooks. 10% would prefer PDFs delivered by email and 3% would read the content on their e-readers.

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44% of all respondents said that they wouldn't be interested in getting their print content through any of these delivery mechanisms.

Who Is Willing to Pay?

Forrester's Sarah Rotman Epps took a closer look at the demographic profile of those users who said that they would be willing to pay. Gender and marital status had no influence on a consumer's willingness to pay. Those who are willing to pay for magazine content are slightly younger that those who won't (43 years vs. 47). For newspaper content, however, there was no difference. Income, too, only makes a small difference. Those with a higher income are slightly more likely to pay for newspaper content than for magazines.

The report concludes that there is no consensus among consumers about how they want content delivered to them. The fact that 10% still prefer PDFs clearly shows that we are still in a transitional period. What is clear, though, is that consumers aren't very willing to pay for content online.

According to Forrester, publishers have two options: continue to offer a free, ad-supported product or offer consumers "a choice of multichannel subscriptions, single-channel subscriptions, and micropayments for premium product access."

As Rotman Epps also notes, there is a third solution: have a third party subsidize the cost of the content. This could be a device manufacturer who wants to offer exclusive content, for example.

A Slightly More Optimistic View

According to a report in the New York Times, about 48% of all Internet users in the US said that they would pay to read news online. This study by the Boston Consulting Group also looked at online news in general and found that a larger number of users was willing to pay. On average, though, these users were only willing to pay about $3.