Will algorithms run our digital lives?

Demand Media (see this brilliant Wired piece), one of the biggest producers and distributors of online video (see the Mary Meeker / Morgan Stanley presentation here; page 42) produces 100s of 1000s of videos on topics that are solely determined by a proprietary algorithm that crunches data on popular search terms, keywords and their current rates on search engines, and information about how many web pages already cover the topic. If a topic is 'hot' and not yet covered, Demand Media commissions an army of freelance video makers, at $20 per video (!), to quickly produce short clips on the topic, e.g. on 'how to heel-flip on a skate board' etc.

Wired's Ryan Singel talks about AOL's similar new plan: "AOL’s new chief plans to combine algorithms, marketing partnerships and cheap freelance writers in order to turn the stale web property into a vibrant online content factory pumping out stories to fit the zeitgeist..." - all for the sole sake of taking advantage of the Google-page-ranking system i.e. to subsequently yield more advertising dollars.

With both examples, the idea is simple: to produce a huge a and hyper-distributed amount of fast, short - and above all - ultra-cheap content that is a perfect fit with the hottest and most expensive keywords on the web, today, so that the maximum advertising rates can be achieved at all times. In other words, this 'content' only exists as a way of garnering advertising revenues based on keyword popularity - hardly what I would consider 'adding value to the content ecosystem' ;)

In music, recommendations are already generated largely by software algorithms and data-crunching recommendation engines; some people even go as far as predicting whether a song will be a hit or not, using smart software engines (disclosure: I am on the advisory board of this company, uPlaya). Google's page-ranking system relies entirely on machine-intelligence, of course, and Twittercounter's top 1000 list is, of course, generated solely by data feeds - not by human editors (such as my own site, Futerati, which will, btw, be relaunched within the next 10 days).

Techcrunch's Arrington talks about the end of crafted content.  Wired calls Demand Media a factory that stamps out money-making content. The Inquisitor talks about how this kind of approach is turning the web into an obese mess. The Washington Post sums it up, rather gloomy: "these models create a race to the bottom situation, where anyone who spends time and effort on their content is pushed out of business."

Here is what I believe:

• Content that is produced only because of keyword popularity and because eager and / or desperate producers (no blame there, btw, just stating a fact) are willing to work for exceedingly cheap rates may bring in the immediate bacon but in my opinion will not last in terms of continuous popularity and therefore in long-term revenues. And if they do, great for them - but it does not mean that all content production will move in this direction. Every single person that likes to eat fast-food still knows the difference between Wendy's and a nice meal: yes, it's more expensive and it takes longer but it's a much better experience, and it makes you feel better. Fast food chains simply co-exist with 'real' restaurants of all kinds, everywhere - and that's what we will have in the content industries, too. If you want to make a quick buck by starting a fast-food franchise, go ahead. I, personally, don't like to eat fast food, nor would I enjoy running a McDonald's franchise so I will go a different route.
• There will always be people who are willing to pay for better, deeper and more 'serious' content, and, in my opinion, increasingly so (mostly because of the trend towards mobile content consumption) - we just need to find new, web-native models of getting paid for content and translate the value of attention into tangible $. Yes, this is a real challenge, today, but new ways are emerging that will indeed provide plenty of resources for the continued creation of high-quality content. Let's have some imagination. Just because 100s of 1000s of aspiring teenagers want to see those free, ad-supported videos on pole-dancing does not mean we won't be selling video-on-demand, DVDs and books on more serious (or indeed, the same) subjects. Cheap, free and low-quality options have always co-existed with more expensive ones, and while the web has made this trend a lot more pronounced it will not spell the end of well-produced and high-quality content - the cheap stuff is simply first because so far we are lacking business models for the better stuff (for the most part).

What do you think?

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AMBC Music Conference: Kevin Burmeister and the new Altnet / Kazaa - back to the stone ages of digital content? Deep packet inspection? DRM? R u Serious?

Welcome to Content 0.0? I am in beautiful Sydney Australia for a keynote speech at AMBC, the Austral-Asian Music Business Conference; for a keynote on Music 2.0 and the Digital Music License tomorrow (August 21, 2009). AMBC is a great event and I am very happy to be here, but for the past 30 minutes we were subjected to one of the most bizarre, desperate and - sorry to be so frank - ...mad schemes of how to turn digital content into money on the Internet - and of all people, by one of the original Kazaa guys, Skype investor, and CEO of Altnet and Brilliant Entertainment, Kevin Bermeister. I have recorded some of his speech on my iPhone voice-memo recorder, and may make it available later, but here is, in a nutshell, what Kevin and his company, Altnet, seem to propose (and be sure to read their recent press release on the relaunch of Kazaa):

1. Put a Cisco 'Copyrouter' into the network of each ISP, everywhere
2. Have the Copyrouter (ouch... that word alone gives me the chills) look at all traffic that is based on or runs on certain P2P protocols, and define what's being shared via the unique hashtags that each file represents. Deep packet inspection... go!!!
3. Block all traffic with hashtags that have been flagged as 'unauthorized' (i.e.... all?), and replace them with files that are DRM'ed (yes... really) and that can be downloaded only if you allow a charge to be levied by your ISP.

I won't even attempt to delineate what I think is wrong with concept because there are so many issues that they would fill this blog for the next 30 days. But the mere fact that this kind of scheme is being presented in a keynote at a leading music industry conference is, frankly, making me feel quite hopeless on the future of digital music. But maybe I am wrong...  you tell me (comment box below)

Anyway, first, Kevin seems to want all our traffic to be deep-packet inspected (i.e. monitored) so that a automatic determination of it being lawful or not-lawful can be made. That, in itself, is a bizarre and utterly unfeasible concept has already been rejected by the European Commission and almost all governments around the world (except for France), because it only points in one direction, and that is towards CHINA's version of the Internet. Police-states, Censorship and severe lack of freedom of expression and speech. Are you serious, Kevin? Is this what you want so that the major labels and studios can keep or shall I see regain total control over distribution of content rather than to license it to everyone, and share in revenues (as is, strangely enough, happening with Google and the record labels in China!)? I hope not.

Second, Kevin seems to want to have the illegal files (again.... that means all files, really) be automatically replaced with copy-protected files (did you think those were retired, too...?) that must be purchased by the user, via the ISP. 

In other words, let's just  re-insert Total Control back into the system, and force every Internet single user to a) pay whatever the price is (without having any say on that) b) use ONLY approved devices that can play back the DRM'ed content. If that's future of digital content... count me out (along with 98% of the online population I would say). Put that Content under the rock again!

This scheme is too painful even to just contemplate; I mean it's so far out that it hurts... so, over to you guys, for comments, please.

My final thought: this reminds me a lot of the recent Onion video ('Google Opt-out Village') that makes fun of how you can regain 100% of your privacy on Google. Watch it and make the connection;). More on this, soon. Update: Read GigaOm's take.

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