OneWorldTv

OneWorldTV represents the real sense of Internet community and global collective collaboration. It is a nonprofit website that shows videos related to worldwide environmental and social concerns, ranging from global warming to cancer, made by journalists, filmmakers, NGOs, and people engaged with a social cause.

Users can deliver 30-minute-length videos and there is no limitation on types of format. Documentaries, short-length videos, and also machinima can be uploaded. When I checked the website there was a machinima report on Global Warming, presented by a Second Life avatar.

OneWorldTV is a part of OneWorld.net, a portal that focuses attention on minorities, releasing independent media content. The portal is also an online community and it is sustained by NGOs, development-oriented news services, foundations, and research institutions.

Changes in market structure

I believe one of the most important and general conclusions I reached reading partially Media Economics and The Wealth of Networks, and The Long Tail is that the changes brought by Internet are not superficial, but economically very profound. The new information technologies are moving market structures to another direction, after decades being anchored in the same model.

I found the explanation of four different market structures in chapter seven of Media Economics interesting: perfect competition, monopolistic competition, oligopoly, and monopoly. This order is from the most to the least competitive markets. The digital revolution, studied in the three books, is causing a decrease in market share concentration in some economic sectors, especially those related to information. If media markets are becoming more competitive, media conglomerates are becoming less powerful.

The barriers to entry in these markets are decreasing, since almost everyone has access to the new production tools. Chris Anderson wrote in The Long Tail that the XXI century is about an economy of abundance, opposing the past century and the economy of scarcity. Another barrier to entry that has been getting weaker is copyrights. The ease of distribution of information enhanced by Internet makes knowledge more available and leads more people to produce and share knowledge. Yochai Benkler spends a great part of his book discussing the open-source benefits and using successful examples as an incentive, such as Linux and Wikipedia.

On another topic, I found an article published by The Economist regarding Anderson’s long tail and citations in academic papers. It summarized research concluding that as more as journals become available online fewer articles are being cited in the reference lists of the papers.

A tumblelog

I have been a blogger for at least five years and I had no idea that new categories for blogs, such as the Projectionist, existed. The Projectionist is a tumblelog and, according to the savvy Wikipedia, it is “a variation of a blog that favors short-form, mixed-media posts over the longer editorial posts frequently associated with blogging”.

The Projectionist integrates writing and streaming media in a webpage. The website has links to major streaming media sites, like YouTube and Vimeo, and it also combines audio files (I opened them using QuickTime). The text is very short, usually consisting of citations, and the blog offers an interesting experience to its readers/watchers/listeners. While users listen to music, they can also read the quotations and navigate to its content and other links.

I personally liked that, but I think the page lacks writing. Sometimes, because of the quantity of media and links, it is difficult to understand what the author meant to communicate with the set posted.

More about intelligence (human, this time)

After last Economics class, I became convinced that we will still discuss artificial and human intelligence many times during this master’s program and perhaps afterwards. Mike Culver, from Amazon Services, was our speaker yesterday and among other things, he talked about the Amazon Mechanical Turk.

The website gives “businesses and developers access to an on-demand, scalable workforce”, as its definition on the first page. Trivial tasks are published on the website (ex: to draw a sheep) and people get paid a small amount of money (ex: $0.02) to accomplish these little jobs. According to Culver, there are people making real money from it. Nowadays, there are at least 200 thousand registered workers from more than 100 countries. Culver also explained that these jobs are called Hits (Human Intelligence Tasks) because even though they are simple functions they can’t be done by computers.

I was amazed by the number of people working on Mechanical Turk and I became curious about which part of the world they are from. Culver only mentioned that users have different backgrounds and different motivations to participate. However, I believe it is more likely these jobs are an alternative income for the “turkers”, who work very hard in different tasks. It would be interesting to know if there is a relationship between the number of participants per country, technology penetration in these places, and income distribution.

Copyrights and the new information economy

Joan Cheverie¹ differs with Yochai Benkler² regarding the changes brought by digital technologies. Although both authors believe that computer networks provide cheap distribution of information, they disagree about the importance of copyrights and other intellectual property protection.

According to Cheverie, copyright systems have been balancing incentives and the public domain. Until now, they have been effective tools to allow authors to profit from their work, but the ease of distribution provided by the internet has made them less efficient. Cheverie believes that the copyright system will have to expand or publishers may have to create ‘digital fences’ to preserve the incentive to create. However, she thinks that digital fences will also enclose portions of the public domain. The author emphasizes that changes in technology or law may reduce the importance of libraries, which have been offering free education, research and content legally.

Conversely, Benkler points out that the majority of businesses don’t depend primarily on copyrights or patents to derive benefits from their research investments. The author shows that there are nonmarket sources (ex: government agencies) and market actors that don’t rely on intellectual property rights. He uses the newspaper industry as an example because their revenues from copyrights are very small compared to advertising and sales at newsstands or subscriptions.

Benkler also writes that there is a little support in economics for regulating information using intellectual property laws: “In the overall mix of our information, knowledge, and cultural production system, the total weight of these exclusivity-based market actors is surprisingly small relative to the combination of nonmarket sectors, government and nonprofit, and market-based actors whose business models do not depend on proprietary exclusion from their information outputs” (pp. 41). He cites other strategies to produce information that do not depend on patents or copyrights, such as “Scholarly Lawyers” who write articles to get clients (pp. 43). Benkler believes that the networked environment allows people to adopt cooperation strategies rather than accept proprietary claims.

¹ Cheverie. J. (2002), “The Changing Economics of Information, Technological Development, and Copyright Protection”. Washington, D.C: The Journal of Academic Librarianship 28 (5), pages 325-331.

² Benkler, Y. (2006). The Wealth of Networks. New Haven: Yale University Press.

Artificial Intelligence?

I think the most interesting topic discussed last Monday was the development of artificial intelligence tools. T.A. McCann, our guest speaker, showed examples of online companies that have been improving programs that aggregate user information. He focused on a project that he is currently working on called Minebox.

Basically, Minebox will be a program to prioritize e-mails and contacts based on the frequency that users correspond, on the number of file’s exchange, and some other features. It will also provide information about the contacts and links to the contact’s personal pages (ex: LinkedIn).

In my opinion, this kind of new tech product is much more effective than the filters that are currently dominant. Filters are supposed to help users to find stuff online but many times end up confusing them. However, I am still not convinced that these programs are able to completely understand and predict personal behavior. I just believe they are excellent gadgets to organize and find information, which is a very-welcome feature in a world where people have been ceaselessly stocking, creating and divulging information.

Although we can publish almost our whole life online (Facebook, LinkedIn, e-mails, blogs, video sharing, and so on), we still have our offline existence, where the most important things actually happen.

Sevenload

Sevenload is a streaming media website that focus on video and photo sharing. I found two interesting features in this site: it offers content in five different languages and it allows users to present their own shows on the Sevenload channels.

Although YouTube also has videos in several languages, it is still uncommon to find other streaming media websites with this feature. Sevenload provides videos in English, Polish, German, Turkish and French. It is important to point out that these videos are not translated from a language to another- they are singular videos shown in only one language.

The other interesting characteristic is the “promotion of stars”. According to the website, there is no limit to upload content. Users can produce complete series or numerous episodes for Sevenload channels. There are distinct categories, such as Music, Comedy, Politics, and Sports, which producers can use to tag their work.

The Long Tail – Discussion Questions

1. According to Chris Anderson (pp. 73) “When tools of production are available to everyone, everyone becomes a producer”. Who is everyone? Does everyone want to be a producer? On what does Anderson base his argument?

2. Anderson believes that popular taste is the result of poor supply and demand matching. Would Anderson consider the Beatles’ success the result of poor music supply? Why are their songs still famous all over the world in a decade that has many other options available?

3. In the chapter 11, Anderson writes that the blogosphere is already competing with the mainstream online media. Even though there are blogs that produce high quality and accurate content, there are many blogs without credible sources and others that are still online but were abandoned. How can Anderson be sure that people will maintain their blogs for years? And for those that are good, how does he know bloggers will maintain the same quality standard?

Complications of the Long Tail: choice, social behavior and costs

Chris Anderson, the editor in chief of Wired, was the first author to coin the phenomenon of the Long Tail. He published an article in 2004 in this magazine, and two years later, released a book entitled “The Long Tail – Why the Future of Business Is Selling Less of More”. According to Anderson¹, The Long Tail strategy for a business is to increase profit by catering to numerous small niches instead of the “head” of the curve, which is made of few commercial successes or hits. Anderson uses large and flourishing Internet companies such as, as Amazon.com, Netflix, and Rhapsody as examples to support his argument. Even though Anderson succeeds emphasizing the recent changes in business led by Internet, the opportunities online retailers saw in an environment without shelves, his analysis is lacking in three main respects: he misinterprets the idea of choice, disregards human social behavior, and omits transaction costs.

According to Anderson, the tail’s growth would lead to more opportunities for costumers to find what they really want in niches. However, he doesn’t consider that personal choices can be related to immediate necessities and time. In the chapter 10, Anderson uses jam as an example to illustrate people’s desire for variety. He compares a supermarket (300 kinds of jam) to an online store (1200 types), arguing that consumers can get the kind they whish. This could be true for a jam connoisseur because this person doesn’t necessarily want to consume the product immediately, but not for someone buying their next breakfast. He also doesn’t evaluate consumer willingness to spend more time online to find all these niches. In the future of business, Anderson sees infinite choices; however, decisions in this environment may be progressively more difficult over time, and there is not enough data to prove consumer’s behavior in an unprecedented market.

The second problem is the inconsistency of his business analysis with the human social behavior. Anderson approximates human preferences as “consumption functions” when he takes for granted that filters are the best connectors of the new supply and demand.

The author says that in the internet era, filters and recommendations are important tools to help people to locate their niches. However, he does not realize that external (offline) recommendations can also modify the accuracy of the filters. One can have a DVD borrowed, a habit of buying two magazines per month in a news stand, and lent books from the local library. The perfect filters that Anderson so emphatically endorses and considers a powerful force of the Long Tail will never have complete data to determine what a person or a company really wants.

The author also discusses hits in the second chapter, highlighting that consumers still look for them, but this search is deemphasized as soon as consumers find their niches. Anderson has qualified data to show that micro-cultures have been growing with the Internet. However, he exaggerates when states that “we [Americans] are turning from a mass market back into a niche nation” (pp. 40). The author believes that the watercooler effect caused by television will turn into diverse virtual watercooler effects. However, many social interactions take place outside an environment dominated by social niches. Most water coolers are in workplaces, after all.

Thompson² argues that there are different levels of interactions and the strongest type is the human and not the one mediated by computer. Discussions and recommendations of foods, music, and other goods that occur in person can do more than point out products that fit someone’s taste- they can change and create desires out of the need for shared experience. If we become a niche nation, will we have something to connect us besides the optical fibers?

Finally, there are some specific economic problems that the author does not discuss in his study. First, he believes that electronic transactions (B2B and B2C) will occur flawlessly. The growth in online transactions has created many opportunities for credit card fraud and requires sophisticated security to protect consumers. Anderson writes “online shopping is still less than 10 percent of American retail” (pp. 147). If the online retailers follow the tail’s growth, a larger infra-structure will have to be generated to support the new demand. Transaction costs are considerably higher if the item needs to be shipped directly to the consumer because of the complex logistics chain, labor, and fuel required to deliver individual items to addresses rather bulk shipments to bricks-and-mortar stores.

Another issue is that the tools of production are not entirely free and, therefore, not affordable to everyone. In the chapter four, he argues that “democratizing the tools of production” is another powerful force of the Long Tail. Even though amateur producers of digital goods have been popularized, he doesn’t recognize that to produce digital goods, people need to have a basic infra-structure (a relatively new personal computer, software, and bandwidth) and knowledge. Unfortunately, full-access to Internet is not a reality for most of people outside the US. In Brazil, for example, the Internet penetration is only 11% according to comScore.

The most important finding of Anderson’s that consumers have been moving from a mainstream to a niche culture during recent years. Nevertheless, his statements about consumer choices will need a deeper investigation, especially regarding the immediate necessity of physical goods and time consuming issues. The author overestimates the efficacy of internet’s systems and underestimates the importance of face to face human interaction, which has been investigated by other disciplines including anthropology and neurosciences. Finally, he omits important aspects of transaction costs that make the tail forces weaker and argue against its practicability. Living in a period of transition, the author starts exploring a possible tendency in the Internet business, but doesn’t examine the complexity of his own discovery. In a culture driven by hits, media conglomerates and high-technology monopolies, Anderson is naïve to declare that the Long Tail will resist and will not be cut off.

¹Anderson, C. (2006). The Long Tail: Why the Future of Business Is Selling Less of More. New York: Hyperion.

² Thompson, J. B. (1995). The media and modernity. Cambridge: Polity Press.

Online Suicide and Anderson

Two points that were discussed last class especially got my attention. The first concerned the negative effects of networks and the second was Chris Anderson’s comparison between bricks and mortar and online retailers.

I was surprised by the shock of some class members when someone brought up the example of online suicides as a negative network effect. It has already happened in Brazil, not only in Japan. Two years ago a 16-year old boy committed online suicide in Porto Alegre, the city where I used to live. He used a method called “barbecue”, asphyxiating himself with the inhalation of carbon monoxide. He told his parents he was going to have a barbecue with his friends, asked them to leave the apartment, and fired the charcoal in the bathroom. He asked for instructions online, posted a picture of the bathroom, and left a letter for his parents. A retired American fireman in Chicago gave him instructions to pass out, because the boy complained that it was too hot in the bathroom in an online forum about suicide. A Canadian virtual friend of his became extremely worried when she saw the posts and called the police in Porto Alegre from Toronto. It was too late.

I was also interested in a question asked by one of my classmates concerning Anderson’s comparison between bricks and mortar and online retailers. In the beginning of chapter nine in The Long Tail (page 147), Anderson explains that less than 10% of American retail volume is online. I believe that he wrote about the traditional retailers because this business still retains an ample majority of sales volume even though it only offers the “head” of the curve. Anderson should have clarified this point in the beginning of the book because consumers accustomed to buy online (and perhaps MCDM students) tend to believe it is common.