Category Archives: telephones

Obsolesence

dfp_500telephone

Hello?

When I was 5 years old we had a phone like the one pictured above.

Like everyone else, we didn’t own it, we leased it from Bell Telephone.

By the time I left home at 18 to go to college, it was still the same phone.

And it worked in the same way.

Last month, I went down to the ATT store in chinatown (the best in NY), and traded in my old

Blackberry Edge 8800 for the new Blackberry Bold.

I opted against the Blackberry Storm, but I am still torn between Blackberry and the iPhone. Maybe I will trade in the Bold for the iPhone. I am not sure.

Now, there was nothing wrong with my Blackberry Edge. It is not as though the trackball fell off, or a few keys fell out (as often happens in my dreams).  No. I just felt it was time for an ‘upgrade’.

The 8800, of course, replaced a Treo 800, which in its course had replaced a Treo 750 which had replaced a Treo 650.  Prior to the Treo there had been a run of Nokias. And before those, in the dark realm of history, had been a run of those Motorola flip phones. God only knows what I did before that, but I have a vague recollection of a pager… but one you could text on.

This is the run of our technology today.

Faster and faster replacements.

I am writing this on the new Mac Book made out of one block of aluminum, so they tell me. That replaced a black mac book which was made out of something else, and that replaced a silver mac book, which replaced a titanium mac book, and so on, all the way back to that orange thing that was made out of plastic, which replaced the Sony which replaced the IBM, which leads all the way back to the TRS 100 I still have in my closet because it is the only computer that runs on D batteries, if you can find them, and who knows what could happen in the event of a global disaster.

Does this make sense?

Like the phones, the upgrades on the laptops keep coming faster and faster and faster.

This is all, I think, a function of Moore’s Law, which says that microprocessor speeds will double and costs halve every 18 months. This has held true since 1965 apparently, and seems to have no intention of going away. And as each doubling of so large a number results in so much larger a number – faster chips for half the price, the technologies that get swept into this continual recasting get larger and more complex.

HD cameras that sit int he palm of your hand and cost a pittance. Drives that hold terraflops and cost less than a donut.  Phones that do everything from email to video to GPS. In fact, I hardly ever use my phone for an honest to God phone call anymore.

We are riding a hockey stick of technology.

That is, we are in the sharp upward curve of transformation vs. time.  Faster and faster, steeper and steeper.

Where does it end?

Do we reach a point where the continual acceleration of technological change and the endless need to upgrade and replace no longer makes any sense?

Do we achieve a point where the day after I have bought the blackberry Bold there is a new blackberry released which obviates my old one?

And does it really obviate it?

I mean, the Treo, the Nokia, the Motorola… all of them still worked just fine.

And they still do.

If I could find the right charger to go with the right phone. I saved all those as well. You never know.

It is not as though the Treo stopped working.

And the Bold seems to work just fine.

And did I really need an iMac cast out one piece of aluminum?

Sometimes I feel like going back to the old dial up phone and just living with that for a while.

Except of course, I hardly ever call anyone any more.

All I do now is text.

Advertisements

Hello?

alexander_graham_bell_500px

Mr. Watson, come here… I need you…

Sometimes when new technologies come along, they overturn the world of conventional thinking – particularly when it comes to valuation.

Take a look at the telephone.

Before Alexander Graham Bell invented the telephone, value was directly married to rarity.  The more rare an object, the more it was worth.  Gold had great value because there was not a lot of it. Make gold as common as lead, and its value would plummet.  So people horded gold and nations went to war over gold. Only kings and very rich people had gold. That was how they liked it.  Open the treasury in the middle of the night and luxuriate in your wealth.

Comes the telephone.

What is the value of a telephone if only one person has it?

Nothing.

Who are you going to call?

If only a few kings and a few rich people have phones, the value increases, but only marginally. Now you can call a few friends,but that’s about it.

However, if everyone has a phone, right down to the local plumber, suddenly a phone is so valuable that you can not afford not to have one.

Now that’s value, but an inverse value from that which had been true through almost all of human experience. It is no longer rarity that gives value, but rather commonality.

What does this have to do with the current crisis in newspapers?

A lot, I think.

Because the crisis we are facing in newspapers and journalism in general is also a moment in which conventional thinking about valuation is being turned on its head, although we are slow to see that , as usual.

Up until now, we have thought that the primary asset of a paper or a TV station was, in fact, the station or the newspaper itself.  It was The New York Times that had the value, or CBS News. The rest, the people who worked there, were in a sense fungible.

In other words, the institution lived on and on, and readers or viewers were attracted to the institution, while the people who created the content for the institution were fundamentally replaceable or interchangeable.

This we sometimes referred to as ‘branding’.

This remained true so long as the technology of the day meant that there were a limited number of pipelines or platforms for delivery of information or content (and the advertising that went along with them).  In the words of AJ Liebling “freedom of the press is limited to those who own one”.

Because it was ridiculously expensive to even entertain the idea of having your own press.  The very cost of a press and the attendant mechanisms of distribution were a barrier to entry for competitors.  Thus, the perceived value of an institution like The New York Times was vested in that barrier to entry.  The reporters might go from paper to paper, from The Times to The Herald to The Daily News, but the paper, the institution would survive.

The reporters were marginal.

The same was true for television.

When it surfaced in the 1950s, the signal was pushed through the air.  There was limited space on the electromagnetic spectrum, so the FCC licensed the limited space to three networks, ABC, NBC and CBS and they held a virtual monopoly over access to people’s homes.

Shows might come and go, but the platform, the pipeline was in the frequency (and in all the expensive investment in infrastructure to push pictures and sound into the air).  The value was in the network, not in the content, per se.  The content was simply the filler, which was changeable depending upon taste.

When cable arrived, it as the same model, simply fractionalized over more players.

The web, however, like the invention of the telephone, changed everything.

At first, newspapers and later television stations saw the web as yet another platform for distribution – a kind of super cable, that would carry The New York Times or CBS shows into everyone’s home.

But that was not the case.

What the web did was to rewrite the fundamentals of valuation.

And like medieval kings, it was and is hard for those who once had the most precious things in the world to grasp that the very definition of value has now changed forever.

What the web did was to take away the barriers to entry. To make the ‘gold’  of the NY Times or NBC’s FCC license as common as lead.

Now, anyone, any time, and for no cost, could get into 2 billion homes. For free.

So where does value suddenly reside?

In the content.

People online are seeking content.

Quality content.

And they do not care where it resides.

iTunes is a classic indicator of what is coming.

In webworld, music is often a harbinger of where the future lies.

When I go to iTunes to download a song, I don’t care if the recording artist is signed with Arista or RCA or Decca or whomever. It does not matter a bit to me.  It is the music I am after.  The ‘studio’ goes away. It is the content that is king.

Each day I go to NYTimes.com to read the paper, but in truth, if Frank Rich, Maureen Dowd, Tom Friedman and a handfull of others were to suddenly break away from the paper and set up their own website (and like Drudge, they might aggregate headlines), I would go there instead.

Now, the NY Times might be in financial trouble, and perhaps their website does not generate enough revenue to support their building, the presses, their trucks, their vast management and HR teams and so on. But my guess is that online revenues from The New New York Times  (aka Rich, Dowd, Friedman and Co.) would more than satisfy the writers.

That’s all that counts.

The content.

So it strikes me as more than a bit odd that when budget cuts come, which is inevitable, the first places to be cut are those who actually create the content.

It does not make sense.

It is like eating the seed corn.

Sell the building.

Fire the management.

Close down HR.

Do anything, but save and nurture the talent.

Or maybe the talent will simply leave and set up their own online ‘paper’. I mean, why do they really need management anyway?

Do The Right Thing

Don’t point that cell phone at me!

The New York Times is carrying a story today that Nokia and filmmaker Spike Lee have signed a deal to create content out of ‘User Generated Content” made on Nokia phones.

Nokia reports that by 2012, one out of four people will CREATE and share video content.

Let’s say that one again: By 2012 (which is only 4 years away), one out of four people will CREATE video content and share it.

That’s a staggering number.

Phone manufacturers such as Nokia are now positioning themselves to leverage off this considerable revolution in usage. Once phones were used for talking. In the very near future, they’ll be used for content creation. Smart phone companies want to be there.

Smart TV and cable companies might also want to be there.

They are already in the business of creating content, but on a very tiny scale (at least compared with 90 million Americans making videos and sharing them).  They deal with a handful of production companies.  But there are literally millions of creators who are poised and ready to go.  What they need is a leader – someone to create the model for them to follow.

Nokia is taking a stab at it.

Others, surely will follow.

But this is going to require a radical rethinking of just what business cable companies are in.  They are used to commissioning shows, running ads and taking the difference as profit.  Passive watching. But we are leaving the passive world for the world of online networks and communities.  Cable companies can position themselves to be the focal point of online video contact and sharing.

They can start, as The Travel Channel has started, with the Travel Channel Academy, by priming the pump, training people who want to do this, and binding young creators (and there are millions of them) to the Channel before anyone else gets to them.  But this is just a start.  Next comes a platform where their material is shared and exchanged easily.

Will cable channels be able to adapt?

One never knows. American industrial history is littered with the corpses of those industries that failed to adapt to new technologies.

One can only hope that existing networks will Do The Right Thing.

The Beat Goes On

handsetpa_228x423.jpg
hello?

The irrepressible power of new technologies both to create and to destroy reaches into every niche. No one is immune.

The phone companies were once the most secure industries and the safest investment you could make.  ATT or earlier Bell Telephone were giants.  And, like cable or over-the-air broadcasting they had a technological monopoly on ‘getting into people’s homes’.  But instead of appending commercial spots to your phone calls, they just charged for the service.

It was  a model that worked.

It worked so well, and for so long in fact, that when radio came into vogue in the early ’20s, Bell Telephone opened (and shortly closed) its first radio station in NY.  It was called ‘toll radio’, and ‘users’ (ie, broadcasters) paid on a per-minute basis to ‘use’ Bell’s radio transmission studios and frequency to broadcast any message they wanted.  Bell took the business model for telephony and simply applied it to radio.

Bell and ATT were children of technology – a linear, point to point technology.  But like any revolution, technologies often eat their own children. And now it is the turn of the phone companies to be ‘eaten’.

The Daily Mail, a UK tabloid I read every morning online more for their stories of what happened to Madeline McCann then for tech news, is carrying a story about a new phone about to be offered in Britain this week.

Britain is rarely, if ever on the cutting edge of technology (at least not since James Watt and the steam engine), so when it appears in The Daily Mail, it is really in the mainstream.

The phone is being offered by a partnership between Network3, a UK company, and Skype.

For those of us who have been using Skype (or Vonage for that matter) for some time, the idea of VOIP is hardly new.  I have not had a landline for several years, and don’t ever see getting one again.  Almost all my calls now go over the web, and my phone bills have dropped to next to nothing.  But we are all ‘early adapters’.  Now it goes mainstream, and it goes straight to the heart of the phone company’s prime source of income – just as Craigslist went at the heart of newspaper’s revenue.

When your average ‘punter’ (UK term) starts making all their calls for free over the web, BT (British Telecom) can start thinking about turning their massive tower in central London into condos.

Releasing new technologies is a bit like opening Pandora’s Box – once opened, you never know what is going to leap out.