Notes on September 18, 2008

Around 1998, firms turn on their axis. Sometimes around June 1998, entertainment and news were products and they were bought, with money. Afterwards, the situation changed and entertainment and news were currency. Market for eyeballs used what used to be products as currency.

Most of the people who bet very heavily that could attract new eyeballs at a very high price got broke (Amazon, surprising). The market was structured in a completely different way that 20th century markets for attention. They were there, but were different.

Murdoch went and learn how it worked, and he kept doing things right that other people were wrong. We’ve been here before, that is the market for attention played by entertainment. 20th century market for eyeballs assumed industrialism as taken. That’s the only model in 20th century technologies.

1. Products become services because services are no subject to zero marginal costs constraints. Microsoft: software as products; they know its wrong but don’t know how to break it. Others are learning that’s true.

2. Pull beats push. 20th century is push media; radio is powerful, because people are born without ear leads. Human brains are developed to take a stream of information into the ears that are different from what comes through the eye. Signal process in the brain for audio, much faster than for video.

That’s why he doesn’t use PowerPoint? . It’s worst, is confusing.

The idea of the push media is an idea with a power concentration behind it. They send the message to you; radio is powerful because you can switch sight attention but not hearing attention. People can do many things WHILE hearing radio.

Free software; it does work. “There are not going to be enough geeks”, not true. People learn.

Ability to mobilize: Hitler, Stalin, Roosevelt and Churchill. Most bad results, but it was there. Ability of radio to mobilize, it put the leader’s voice inside the house. The first president of the US to be known (his face) to the American people was McKinley? . Twenty / Thirty years later, the voice was there: from the lips of the leader to your ears → produces a powerful psychic change in the relationship between the State and the citizenship.

20th Century is PUSH media. Triumph of the will is to film what speeches is to radio.

http://en.wikipedia.org/wiki/Triumph_of_the_Will

TV added to radio a defect and a power. Defect: you have to LOOK at it. But it appeals to the sense that what you see is now.

Why politicians lie? People say. Because it works. What is said appeals to the emotion, and that what is seen, is true. TV provided fertile opportunity for lying. There was nothing beliable about TV but it induced belief.

Pull, beats push.

Just see at the clicker of TV. Pull medium for television. But it still is a push media with limited opportunities for pull. But there is a desire to pick; the clickers is not the idea of the broadcasters; it freaks out advertisers because viewers leave.

Morita, SONY guy who invented the Walkman. It was destroying the music industry. The desire to make pull as a way of selling the product (service of giving you what you want) began to create a hunger for pull media before there was any.

Usually, culture changes and technology fixes it in a way we can understand.

The net has no bias for push over pull; correctly engineered it has a bias for pull over push media. Emails are push media.

RSS → It’s a pull understanding; TV is push, YouTube? is pull.

http://en.wikipedia.org/wiki/RSS

Development of radio in America, it got territorialized because the idea was to push over territory. And the territorial governments got involved, and they’ve said we will not let you use it (“Tragedy of the commons”) so we will use it.

http://en.wikipedia.org/wiki/Tragedy_of_the_commons

RWANDA Genocide happened solely on account on radio, organized through radio.

Interference of frequencies: the model assume dumb devices; today cell phones get out of the way from each other.

Technological limitations. China is trying to control, because freedom is not their idea. If the experiment is successful, governments will imitate it. Free software will be tried to be used against us. It’s not about the political economy of the net, though. But there are political considerations; I didn’t mean to suggest that technology dominated media policy in the 20th Century.

Likely scenario: media has to let the president be president, and the president has to let Murdoch be Murdoch (note: scratch each other’s back).

USA can’t control de Internet. You can’t have a large-scale financial market economy in a world where the Net is controlled. Chinese communist party problem are interested on how to make interoperable a closed net with an open net.

Rules on regulation.

- A government that has to close the net. How would they do it? I would regulate the switches; all politics are about regulating the switches. The problem is that there are so many… Microsoft and Zune: tried to be open and close at the same time, you can’t do it. - Speed is unimportant, unless you are sharing music and movies. You have to be on the anarchist economy in order to need it. Fucked up bandwidth economy. What we use the bandwidth for in a good-engineered net is in order to get what we want, when we want it. And what we want is peer.

- There are points of choke. I am not sure if the backbone is, because I haven’t used spectrum (i.e.).

iPhone, the people of NOKIA had it. But in 2003, they didn’t want to risk offending the networks by building a WiFi? phone. For a moment now, lets this suppose that it’s the only way: cost too much, got to get permission from Steve because he owns the empire, but its good so far. But it will die. Google phone just made to make search in Google. NOKIA released Symbian.

They have a problem: they need a patent, to have a building community. Google won’t sell very much. You’ve made a lot of software that sold 10 million phones; that would be nothing.

ANDROID is the thing that is designed to prevent the troubles to hit Google.

I’ve said the NET grew in a way that contradicted theoires on how the media should work. We are inside that NET in which the regulatory system is out of touch with technological reality. Misunderstood and misregulated the Net.

That as a physical entity, was misunderstood by American Law. In that net, distinctions between kinds of bitstreams began. Executable files were the first. The technical carachteristic of the Net was not owned, and could be changed by people with purposes other than protecting ownership.

Entertainment, currency used to buy attention.

Process of payment in the Net started out in an ugly way, using credit cards. We had the techonology for security digital cash, but it couldn’t be moved / exported from the US because it wasn’t feasibe to think in a global system of paynment without encryption, because of the spooks. Credit cards: problem. They are not self authenticating, the seller could prove that the credit was valid, that he could charge, but he can’t prove that the party profiting was the one authorized to use the credit card. In 1974, without a committee report, the US Senate added to the Fair Credit Cards Amendments outstanding good cosumer protection for credit cards.

If you have a bona fide dispute with a merchant, or is used, you are not liable for the charges. For more than 50 dollars, and you may indicate in writing the existene of a bona fide dispute, and you don’t have to pay.

The use of a pin code leaves to a consumer no luck whatever.

The law forces them into a direction that they didn’t think they wanted to go. They have to collect information on who you are, to check. And after about ten minutes, they’ve realized that that is the currency. We live in a fishbowl, because encryption was stoped by the spooks. By the time we destroyed US encryption, the Clinton administration had surrender, and vast data bases was out there.

Privacy information: and that stuff is valuable. It’s the eyeballs which is valuable, let’s get more information about eyeballs.

Related to another issue: Reppeal of the Glass-Steagall Act (1935)

http://en.wikipedia.org/wiki/Glass-Steagall_Act

Established limitations on ownership of investment banks by insurance companies. From the very first moment, rich people tried to repeal that Act through lobby.

Repealed on November 12, 1999 by the Gramm-Leach-Bliley Act signed by President Bill Clinton.

http://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Act

Everybody remembered about it last weak.

It was no longer about banking, it was about information control. The theory is that you are totally known to a bank that is also an insurance company; they know exactly what you want and need. They would be able to make perfect products for you, which are just stories to get your money.

The Act eliminated the cross-ownership restrictions. Within that structure, they may share all the information they had. The insurance can share within the stockbrokers, and the brokers with your bank. And everybody knows how to get to the equity of your house. They can’t share outside the merged companies.

The lesson: you can’t repeal it anymore. There is nothing you an do, because today you can’t run an investment bank that doesn’t have that pool of money of depositors’ money.

At the end of the 1990’s, the idea was information will allow us to get to the money. They were right. In the 21st century, you can commit adultery but you bank will know.

Ideas: securitize all your homes and sell them to foreigners, as long as you took foreigners money and use it to buy stuff they make. The foreigners came back and said, time to get out of your house. How about if we can keep making the payments… Republicans. And now, what should happened is the candidate who will win should say: we did this. It’s not your fault, at least I can promise that it won’t happened to you again. Because we made the decission that information about borrowers were more valuable than all houses in the US.