Here is a question for all you legal scholars out there.  Is a tweet copyrightable ?  Is a tweet copyrighted by default when its published ? Can there possibly be a fair use exception for something that is only 140 characters or less ?

I got to thinking about this when I tweeted about an NBA game.  I tweeted to the people who follow me.  While I never asked that they not distribute it to other tweeters,  i did not give anyone permission to republish my tweets in a commercial newspaper, magazine or website.

So when an ESPN.com or any other outlet republishes a tweet, have they violated copyright law ?

Is twittering the process of publishing in 140 characters or less, or is it a private communications to those that follow you ? Even if you dont block outsiders from seeing it ?

You could also extend this to Facebook. Do you own your status update ? Is it a private communications between you and friends, or is a published work ? If a newspaper or website wants to publish your status update, do they need permission first ?

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Thanks to a comment poster for bringing this back to my attention.  Its an interesting read from November of 1999.  I sure had high hopes for video.

by Larry Lemm
November 1999

This last Spring, Yahoo!, the Internet portal, paid about $5 billion worth of stock to acquire Broadcast.com, a streaming video company. This transaction solidified streaming video as a technology not only to watch in the future, but as a technology to use today. Mark Cuban, a founder of Internet video portal Broadcast.com, is very hopeful about the opportunities this technology opens.

Videomaker: What is Broadcast.com and what do you offer fledgling video distributors?

Cuban: Broadcast.com’s mission is to turn the Internet into a broadcast medium. We are much like the DirecTV of the Internet. We have put together the technology, infrastructure and software, and have aggregated content in order to aggregate audience. With this base, we offer content creators the ability to put their products of all kinds in front of an audience at a minimal cost.

Videomaker: Recently, I believe you made the statement “eventually most of the streaming video that people will see on the Internet will be home videos.” Why do you think that is true?

Cuban: Only because of sheer numbers. It will be so easy to present video to small audiences. Instead of the summer vacation or wedding video sitting on the shelf, we will post them on our family web sites so that grandma and grandpa can watch whenever they want. We will do the same with high schools posting their games, debates and school plays.

It will be far more convenient than corralling everyone into the family room or making copies of the tape to send everywhere. When you add up the numbers, a couple of hours from a lot of families dwarf the total amount of content created by traditional producers.

Videomaker: When do you think we’ll see this shift in focus from commercial video to personal video on the net?

Cuban: Over the next two years, as people get cable modems and DSL lines, they will start to put pictures, then videos up. All you have to do is look at the new Sony PCs with IEEE 1394 i.LINK interfaces to see how easy it will be. Soon all PCs will have these interfaces and the floodgates will open.

Videomaker: What opportunities do you think this will present to videographers, Webmasters and advertisers?

Cuban: There are two elements here, true businesses and labors of love. The labors of love that are non-commercial, will thrive. People will create their own El Mariachi-type productions for the ego gratification and some will get discovered and go on to bigger and better things.

For businesses, there will always be a place for quality production. The quantity of home video will almost be equaled by the quantity of corporate video. These businesses will need top-notch production services for Internet and Intranet video. Every new product, shareholders meeting, new building and maybe even new employee will have some video component that will be hosted by the company. Webmasters will have to know how video on the Internet works and have partnerships in place to host and promote content that will reach outside the corporation.

For advertisers, the realization should set in very quickly that the Internet world is no longer flat. That banners to catch people’s attention will diminish in effectiveness and video and other multidimensional elements, from animation to future media types will take their place. The agencies and advertisers that learn to harness this ability, particularly in a broadband world, will get far better results

Videomaker: What will Broadcast.com do to support this trend?

Cuban: We will continue to build our infrastructure to support the largest possible audience. We currently are pushing out broadband video at 700k, 30 frames per second. We will continue to push the envelope of technology, working with advertisers to introduce broadband video ads on our site, Media Asset Management partners such as ISLIP technology and with digital distribution opportunities as well.

Videomaker: Do you think that streaming video will begin to rival television as the video delivery medium of choice?

Cuban: I think that in the next five to ten years you won’t be able distinguish between the two. Think of it this way: ordinary cable TV is just a video monitor attached to a dumb computer (a set-top box), connected to a cable that goes to a network. The problem is that it’s mostly analog and doesn’t scale or do anything else. My personal thought is that a Pentium computer will replace the set-top box. It will have a DVD player, HDTV decoder, wireless keyboard, analog TV tuner, IEEE 1394 and USB connectivity. It will have a hard drive for a personal TV recorder and high-speed Internet access via an Ethernet connection out to a cable modem or ADSL line. And it will connect to a TV or PC monitor or both. Most importantly it will look like a DVD player instead of an ugly beige PC so we won’t be afraid to put it on top of the TV in the living room. All of this will become available for under $1500, starting by Christmas in small quantities, quickly dropping to under $1k next year. With one of these in the bedroom and living room, you won’t care if what you are watching comes from a traditional TV station over cable or from Broadcast.com over your Internet connection. You will just hit a button on the remote and go back to eating popcorn.

Videomaker: What is the most important thing a home videographer can do to get ready to stream video?

Cuban: Play with it. The more you know, the more you can try. You can go to real.com or microsoft.com/windowsmedia and find out what you need to digitize your creations. Once you have learned to digitize, you can get low-cost hosting space on sites like simplenet.com and upload.

Videomaker: Where do you think the future of Internet video is headed?

Cuban: All media used to be defined by its spectrum or physical form. You had a TV channel. You had a tape. Now all media is going digital. In a digital world, media can be stored on any digital platform, from a hard drive to a personal digital recorder. Or it can be transported on any digital medium from digital cable to DTV, to dialup over AOL. Because digital transport, like the Internet is becoming more available and less expensive, I think we will see digital video content becoming far more available where we want it, how we want it. This is both good news and bad news for the video business. It means there will always be an outlet for your work and that there will always be production demand. But because everyone has access, there will be far more competition to be seen.

Videomaker: What do you think will be the biggest innovation for streaming video in the next year?

Cuban: Falling bandwidth prices. More bandwidth to the office and home means more choice and opportunity.

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It was a sad moment. Yesterday, prior to the Mavs – Warriors game I went through my pre game routine on the Gauntlet.  Over the years the number of people asking me questions has varied from game to game.  From as many as 10 to as of yesterday, one. Eddie Sefko of the Dallas Morning News was there to ask some questions.

There weren’t bloggers. There weren’t wire service writers.  Just Eddie.

I recognize that this is partially a function of the fact that we are in the 8th slot rather than in 1st place. I also recognize that if I resigned Dennis Rodman or brought in Terrel Owens for a 10 day, or did or said something controversial that would change over night.

The Morning News and all the local papers and online and offline media are still covering the Mavs. We still get the ink, but the real question is what would happen if our local papers shut down and went online only ? How would we reach the casual fan that wont invest time to go to the online sports section or the Mavs website ?

Its a possibility I have to figure out how to deal with today

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I love this on going discussion. Of course all of you who think that the OPEN internet will be the primary platform for the delivery of traditional tv content are wrong . But hey, thats what makes a market. Before I get into dismissing some of the traditional arguments why Online TV will take over, let me start you with one that hasn’t been used. Rural Broadband.\

Have you heard much about FTF – Fiber to the Farm ? or FTT – Fiber to the Trailer ? If traditional TV is disintermediated by the internet to the level of Newspapers or the Music industry you know what happens ? The politicians are going to get slammed with complaints about lack of access to Internet Delivered TV. Which in turn will mean the rest of us subsidizing bandwidth and delivery infrastructure to BFE (yep, fiber to there too). So be careful what you ask for.

And as far as al a Carte pricing. The discussion has been limited to cable networks. But of course its a slippery slope. Why stop there ? As I wrote last year, al a carte doesnt have to stop at the network level. Why pay for the entire network when you don’t watch every show. Why have to pay for the entire series of a show when you don’t watch every episode ? Why have to pay for the entire episode when you only want the parts you like and you can get them segmented like you want on Youtube already ? Why have to pay for all of sportscenter when you only want the segments on the NBA ? Why pay for all of Saturday Night Live when you only want the segments spoofing the President ? Why pay for all of Colbert or Stewart when you will pay a little bit more to get the segment that everyone votes is the funniest ? Where does it stop ?

But I digress.

Lets get to the comparisons to why subscriber supported TV will be disintermediated just like Music and Newspapers have been. Content wants to be free , right ? And if it can be free, it will be free. Right ? If content is available for free on the internet, its over for the incumbent producer of that content unless they adapt and adopt the new internet based model, right ?

Music messed up by trying to fight the internet when it was obviously inevitable that music would go digital. Newspapers may or may not have messed up by making their content available online but with the exception of the Wall Street Journal, which can move markets and therefore support a subscription model, the cat is out of the bag, newspaper content is free and on the net. Worse for the newspapers, much of the information any given newspaper publishes, with the possible exception of hyperlocal, is readily available from multiple sources across the net. In addition, the populist blog movement has created an unlimited number of publishers on any given topic, and the Twitter movement has added the realtime crowdsourcing of news and opinion in a way that newspapers cant counter. Sound about right ?

All true. But none is relevant to the Traditional vs Internet TV argument. Here is why:

1. In both music and newspapers the internet option is the path of least resistance.

Used to be that you had to go to the store or an online store and buy a CD. No instant gratification. The CD wasn’t usable in every device you wanted to listen to music on. If you wanted to listen on your IPod or your PC, you had to convert it to the proper format. Thats time and work.

With newspapers, you had to wait for their delivery. Its just easier to go to the net or your TV and get the news ,opinion or reporting you want than to wait to see what is delivered to your door. While some of us like the convenience of having new stories on a single platform, the physical paper, for most people that is not important enough to them.

Time and Work are platform killers.

The path of least resistance to get TV, is turning on the TV. It works. It works fast. It”’s reliable. The product is consistent and equal for everyone. It is predictable. The best content is available first on TV. The same can not be said for internet delivered TV. In fact, its the opposite. You have to work to get your internet TV to work. Which site has which content changes. Which content is actually available changes. Internet TV quality is not consistent from usage to usage. Internet TV requires upgrades to software to stay compatible which creates work (your next flash/silverlight/quicktime upgrade is when ?). The experience is not consistent from website to website. So every time you want to sample something new, you never really know what to expect. TV is the no work platform relative to Internet TV

2. For both music and newspapers the quality of delivery of the content is as good or better on the internet than the physical product

The experience of reading a news story online is not any worse than reading it in a newspaper. Some may prefer a newspaper, but no one feels like they lost something by reading it online or on mobile.

For music, the digital experience of listening to music from an Ipod/Phone/MP3 player/multimedia PDA can be far superior to a CD, and its rarely perceived to be worse. True, some audiophiles may not like digital, but when you listen to your IPod, you get a very good audio experience that you can enjoy anywhere. It can easily be argued that digital is far better than the traditional CD method.

Thats not the case with TV. In just the past 3 years, the TV viewing experience has improved considerably with HDTV and blu ray. But lets put those aside since they are not yet ubiquitous. Traditional TV is a better, more consistent experience than internet TV. As Netflix will gladly tell you, the quality of your experience is dependent on the quality of your connection to your ISP and the quality of your in-home network. Things they have no control over. In addition they will tell you that things that you or others are doing on your PC dedicated to Online TV, or on other PCs on your in-home network, will impact the quality of your experience. In other words, to watch TV, you have to adjust your life and accomodate the PC based lives of others in your home so that it doesn’t interfere withyour Online TV experience. With Traditional TV, it works. You can add as many TVs as you want, and it works at the quality levels you expect.

Internet TV doesn’t match the quality of Traditional TV. Now I know what some of you are thinking. That all of this will be cured with the upcoming onslaught of bandwidth and some undetermined amazing technologies that have yet to be identified that will solve these problems. Ok, when those things happen I may change my position. But I don’t see them anywhere on the horizon right now. In fact, as I have said before, I believe that the innovation that will occur for internet video will be bandwidth consuming applications. Give kids 100mbs or more of sustained bandwidth to work with and they will come up with applications far more interesting than TV. Can you imagine the games you could create ? The health care apps ?

3. Video advertising works better on TV than on the net. Yeah, I said it. Deal with it. Look at the schlock that is passing for advertising on the net. Im not talking about the ad content, Im talking about the ad technology. You are watching a video and you get some dumbass overlay at the bottom of the screen. That is the future of internet advertising ? And do you realize that when you have ad people producing video ads for the net, to create the quality of ads they want to create, it still requires the same people/costs to produce a 10/15/30 second ad to run as a pre roll or inserted ad as it does on TV. Remember, these are the same ad execs that are still producing ads on 35mm film and only converting them to SD quality to run on TV. Do you really think they are doing it any differently for internet video ads.. Think again.

But wait , there’s more. Some have said that there will be untapped geniuses creating new content for the net that will blow away the content that is produced the old fashioned way for TV. That it will be better, cheaper faster. Well I have a suggestion for all of those people who put themselves in that category. Do it for ads first. Find a video based advertising solution that knows which half of its ad budget works. We aren’t talking a 30 minute or 3.5 minute video show. Just a manner of advertising that can be produced in expensively and provide a real source of revenue for all that amazing content that is going to be produced on the net that people want to get paid for. Is that too much to ask ?

But before you do that, let me offer one piece of info for you. You would think that by now there would be some level of video interactivity available for internet video, right? Hot spots ? Click anywhere and go somewhere on the net ? It’s technically possible, but 99pct of the internet isn’t compatible with them and the likelihood of standards appearing in the next 3 years are slim. On the flipside, there are real steps forward being taking , finally, with interactivity on TV. All those set top boxes are digital. They run software like Tru2Way. They really do track usage in a verifiable way that advertisers trust (disclosure, I have an investment in Rentrak, a company that does this). Things that the internet is capable of doing with video, but for which Google has not really approved any standards. Yep, think your reliance on Cable .Sat. Telcos is interesting ? The future of internet advertising standards is in the hands of Google and their Youtube volume.

In order to be sustainable as a platform, there has to be a way to pay for it. TV is winning this battle and by all appearances is advancing further, faster in a more standardized way than Internet Video. Hard to believe, but you need to ask yourself “Who would you rather depend on for open platforms and standards for advertising, google or cable/satellite/telcos”.

I’ve been wrong before. But every time I look , everything points to digitally delivered TV over cable/sat/telco advancing further and faster than Internet delivered TV.

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I’m outraged and so you should be.

We work hard. We want the biggest selection of TV networks and on demand content that we can get. Preferably in beautiful high def. to enjoy on our new or planned HDTV.  We pay our bills.  We watch TV.

We watch it alone. We watch it with friends. We watch it on our schedule on our DVR. We watch it when scheduled so we can talk about it with our friends while we watch or after we watch. Why ? Because we know they are watching to. We don’t want to go through the hassle of searching through millions of different options when we can sit back and with a single hand, while we are on the couch, often with our favorite beverage in our non remote control hand, surf the entire universe of hundreds of channels offering thousands of hours. With one hand. When challenged we can talk on the phone, check a website and eat pizza, all with the other hand.

Those of us who enjoy this matter of life should be completely outraged that there are those who are leeching off the money we pay to enjoy tv.  Our check goes to pay our bill. The money then goes to pay for the tv network, which in turn goes to pay for the content. Its a system that works.

Like any good system, there are those that want to have their cake and eat it to. The content we pay for ? They want it for free.  We pay for it, they want it for free.

How is that fair ? Where is the justice ?

We pay for the content. We should be able to get it where we want it, and when we want it. Those who want  it for free ? They should pay too.

Call your cable/telco/satellite video provider and tell them you don’t think its fair that the content we pay for is available for free !

Content Payers Unite !

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= How many people have really given up cable or satellite for internet only delivery of content ? 100k at the most  ? Based on company reports, it seems like people are giving up their wired telephone lines at home long before they give up their cable/sat/telco TV

= Why are DVR sales continuing to climb ? if the internet is a better solution, why buy, lease or even use a DVR ? Shouldn’t DVRs be immediately obsolete ?

= Technology doesn’t always move in the direction you expect it to.  Anyone for faster airplanes ? The return of the Concorde ? More efficient electricity grids ? More fuel efficient cars ? You can blame the lack of progress on the incumbents or their industry, but doesn’t that make my point ?

= Read this great post from the NetFlix Blog Why do people ignore in last mile and  home bandwidth constraints ? More devices at home, more utilization,  more hard drive storage, require more backups, which consume bandwidth, whether local or online.

= Why do people think that bandwidth to and in the home will grow faster than applications can consume it  ?  If you believe in the inevitable progress of technology and innovation then shouldn’t you believe that this collective genius will come up with better uses of increasing bandwidth than replacing TV ? I certainly do. Health Care, Security, Who knows what, have to be a better and more rewarding use of bandwidth than just TV.

= Always remember that the long tail of content, whether audio or video, never gets paid. Thats why its on the long tail.  One hit wonders do not disprove the rule. Creating hits is hard and very much a numbers game. Any content game that is a numbers game is expensive to play. Which explains exactly why there are so few internet video only companies (our friends at Rev3 being hopefully a shining exception) making money.

= P2P has been around for how many years ? It has yet to find commercial success anywhere. Its not a solution to any problem and in fact is a huge risk. Anyone with any sense of fairplay knows “free bandwidth” for commercial distribution of content is inherently wrong.

= For all those that think there will be an explosion in bandwidth, remember we are in at least a recession, if not worse. Don’t expect any capital to be invested to take the last mile to multiples of current experiences. In fact, you might see the opposite as capital constraints encourage networks to try to manage as best they can with what they have. It could be far worse on the wireless front as lack of capital could shut down installs

= Got to love all the give and take. Keep the comments coming

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I was reading an article where the Boxee CEO said content would eventually be al a Carte. Why does he, like so many other internet people think content producers are stupid ? Has he, along with so many others pushing internet video not noticed what is happening to the revenues of the content and distribution industries ? Ad Revenues are falling. Quickly. DVD sales are slowing. The per subscriber fees they are getting paid are going up. Not only are they going up, they are consistent.

Now I dont know about you, but for HDNet and my other content companies, we tend to be very nice to those of our customers who pay us every month. Commentary from cable networks and their content producers are saying the same thing. They can’t afford to upset the people who pay the bills.

Which is exactly why, as I have said before, Jeff Bewkes, of Time Warner’s model of TV Everywhere is the EXACT RIGHT MODEL for content creators, cable networks, and video subscription providers like your local cable, telco or satellite provider.

The vast majority of broadband internet users already subscribe to a video service, so for most people they would not even notice a change.  So it would make absolutely zero sense for legit content providers to compete with the most consistent and largest source of revenue they have.  In fact, because the TV Everywhere approach will most likely not only increase the value of cable, telco video and sat video subscriptions, but also increase the value of broadband and mobile internet subscriptions (because of the content and the fact  the video can be hosted intra- network and deliver far better quality), TV Everywhere should be a no brainer

As much as over the top providers or interfaces like Boxee would like to think that LEADING content providers will slice and dice content to make their business models work. They won’t.  They arent’t that stupid.

Updated : One of the commentators made a point that I’m mad at myself for not making.  The gist of which is simple, why is your internet access  not a la carte ?

I only go to maybe 10 sites regularly. I get RSS feeds for another 50. Why should I have to pay for the resources required to provide access to the other 10zillion sites that consume resources ? Why shouldn’t I only pay for the 10 I go to ? I never go to sites like Revision 3, why should I contribute to the infrastructure required to support it. If they want to reach me, let them spend some marketing money and convince me to pay for their content.

If I want blogmaverick to be more popular, then I need to market it so that people will pay for it, right ? If blogmaverick is any good, I should be able to get an ISP to pay me a nickel per month and charge their subscribers that want this site 8c per month, right ? Why should people who dont come here contribute to the cost of enabling readers to come to this site ?

Why should I pay for my ISP to provide bandwidth for P2P downloaders ? I only want to pay for the bandwidth I consume, not a bit more. 99pct of the sites i use are text based information sites. Why should I pay for the bandwidth I might consume  ? I only use the internet 8 hours or so a day, why should i pay for the other 16 hours in a day ?

Worse yet, because of the P2P bandwidth consumers, not only do i subsidize their habits, but they slow me down. So I’m paying to enable those that distribute content via p2p to do it for free(big companies like NBC Universal as an example), and Im paying for those who download the content via P2P to do it by consuming a disproportionate amount of resources that I pay for.  AND they slow down my internet connection when they are on my network segment.  At least my tv picture quality is never impacted by who is using it or how much they pay.

If al a Carte is the way of the future, then it should apply to the internet as well, right ?No one wants to pay the cost of the websites they don’t use, or the bandwidth they dont consume, right ? Bring on Al a carte internet. Make those who want 1mm websites available pay for it !

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First, let me say that I can think of nothing I would rather have our politicians do than argue about AIG bonuses. The more time they spend fighting for TV time to mislead their constituents into thinking they are doing something, the less time they have to actually do something and screw things up.  Worrying about last year’s bonuses is easily the best use of their time.

While they do nothing, the real change is going to come from small businesspeople who are freaking out about the best way to stay in business and serve their customers. The people who can’t sleep at night because of it, and when they do, all they do is dream about work. You all know who you are.  Here is one example I wanted to share.

Hello Mark! My name is Jeremy Parker and I am a 23 year old entrepreneur.  I am
the CEO of Tees and Tats, a high-end, limited edition t-shirt line
designed by world renown tattoo artist Marco Serio.  We launched the
line last July, with much success, selling to many high-end boutiques
all over the US and Canada.  But starting last November, our sales
started to slow dramatically, as with the rest of the economy.  A
large percentage of the stores we were selling to – closed, and the
stores that have survived are not placing re-orders.

I did not want to concede to failure- because if the entrepreneurial
spirit dies, America will be in a much worse place. I knew the store
issue would still be a problem, because high-end retailers are not
buying goods anymore, but I came up with an idea that I thought might
help our online sales.

I first lowered our prices from $110 to $55.  This helped a little
bit, but people where still not buying like we saw earlier.  So I came
up with a concept that at the time seemed bizarre, but now has proven
to be a savior for us.

Now when a customer buys a shirt on our website (www.teesandtats.com),
they are told the price of the DOW.  For every 100 points that the DOW
drops within two months after the time of purchase they receive $5
dollars off of their purchase.  For example if a customer buys a shirt
for $55 dollars and the DOW is 8200 and two months later the DOW is
8000 – the customer gets a check in the mail for $10 dollars. The
reason why people aren’t  buying high-end fashion- is that they are
nervous about affording food, rent and other necessary living
expenses.  Obviously very understandable.  So by assuring them that if
the economy deteriorates even more they would get some money back –
it made it very enticing for many customers.  Our sales have been up
significantly since we started this.

One important additional element to the Tees and Tats philosophy is
our desire to give back. For every T-shirt sold in the initial
collection, we are going donate a percentage of proceeds to the
non-profit ArtWorks Foundation. Based in Englewood, N.J., ArtWorks
provides children and young adults suffering from chronic and
life-threatening illnesses, and their siblings, access to creative and
performing arts programming which encourages the use of the creative
process as a vehicle for healing, communication, self-expression, and
personal development.

I just want to thank you for listening to my story, and I want to say
that as things are looking bad and seems to be getting even worse– It
is going to be the American people who are going to fix this problem.

Best Wishes,
Jeremy Parker

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People can argue all they want about bonuses being a requirement to keep good employees.  It’s a lie.  Good employees with big cash bonuses due, stay at least until they are paid. Once they get paid, they see themselves as free agents, pure and simple.

Retaining GOOD employees has absolutely nothing to do with the bonus they have already earned.  Keeping good employees has everything to do with their next deal.

Here is what good employees want.

They want the  ability to be good at their job.- Are there any stellar revenue producers worth a damn that are going to stay at AIG ?  Hell no. Can you imagine the opening line of an employee from any of the AIG insurance lines… “Hi, Im from AIG and I’m here to help”. Yeah, that will help close a deal.  Every salesperson worth a damn over there knows they don’t have the capital to take risks, which is what they need to do deals and make money.  They also know that all the easy money has already been made and if you work at AIG you are going to be under a microscope with everything you do.

Of course, AIG competitors know this as well. You can bet every AIG employee is playing out the bonus season. The good employees are gone once the bonus issue is resolved. They are off to a company that has capital to cover the insurance and other products they get paid to sell.

And this doesn’t only apply to AIG. Any financial company without  capital to backstop financial products is going to lose their best people.

Good employees also want to be in demand.  They want to be loved and they know the only way to get the love is to test the free agent market

The ultimate arbiters of efficient markets are free agent salespeople. They are going to follow the money. They will do more homework than you and make sure they have every opportunity to get paid. Not only will they follow the money, they will play off the desperation of companies that feel they are going to lose their people as leverage for their next job.

In negotiating their new deals, these free agents are going to know the following:

a. There is a very good chance that stock prices will go up.

b. They are going to get paid very generous stock option packages because stock prices are depressed

c. If they can get huge numbers of options at current prices, any decent increase in the market over the term of their vesting periods can make them 10s, if not 100s of MILLIONS of Dollars.

The only possible way for  Citi, AIG and the banks that are struggling are going to get and retain employees is to overpay with stock options.. They know they can’t offer them a great deal making environment in order to be great at their jobs. So instead, they have to overcompensate them in options. Their pitch will be simple. We are giving you 1mm, 2mm, 10mm options at 50c, or $1.50, or $4, whatever. Remember when our stock was 50 last year ? Well if we only get back to 10, you are rich.

That my friends is a story any free agent will listen to. For that much money, like in pro sports, they will play for a losing team. That is what retention for many struggling financial companies will look like.

The good banks like Goldman will offer them the chance to be great at their jobs, and make some money if the stock goes up to prior levels. These employees will be able to make real money from the deals they close. The bad banks will offer stock packages that will seem like lottery tickets.

I can’t say that I know about any specific packages being offered. I don’t.  What I do know is this. If and when, next year or even 2 or 3 years from now, a few of the banks that are currently struggling  start paying back their tarp money, the headlines are going to be outrageous.

The fact that they can pay back the bailout money will probably mean they are in good shape.  Which probably will mean that the shares are selling for far more than they are now.

Which all in all translates as follows, the banks that needed the Tarp money the most and survive,  will end up having execs that make the biggest hauls from stock compensation.

The headlines will read ” Bank Execs make 100 million in just 3 years from stock options as taxpayers wait for their profits “

Rather than arguing about how execs are getting paid for yesterday, our politicians should discuss the best way to pay them for this coming and future years. Thats when the real money will be made and everyone who is any good in the financial industry already knows it. Its just the politicians that dont

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Its unfortunate, but true. The internet is not a driving force in our economy. Its a stable mature platform on the same level as electricity, phone service and TV. You can’t live without it, but don’t it expect to be a catalyst for the economy. We now argue about whether new companies have a business model and can be profitable and get excited about updates rather than new competitors. Thats the sign of a stable market.

Its time to look elsewhere for that “thing” that takes us out of our economic doldrums.  These blog posts created a big stir when I originally posted them. They  aren’t controversial anymore.

If you are young, super-smart and looking to have an impact. The internet is what your mom and dad got excited about. Find something us for all of us to rally around and change our lives. Please.

Here are the old blog posts:

The Internet is Officially Dead & Boring – Its the economy stupid !

Feb 10th 2008 2:45PM

There was a lot of discussion about my previous posts here and here. My point is that the internet is a stable platform. Its a utility. Its evolved to the point where you can count on it and develop applications for it without much fear that its going to change.

What confirms my point is that with all the talk of a possible or existing recession, not a single mention is ever made about how increases in productivity from technology will pull us through. That is counter to the recessions of the past 25 years. Whether it was the early 80s, the 90’s or even the post bubble , economists and others pointed to technology as a catalyst to productivity that would help pull us out of our economic doldrums.

When there were boomtimes , as we saw from about 91 to 2000, technology was given the lions’ share of the credit.

So where are the claims of further productivity enhancements from technology ? They are no where that I can find.

In fact, we can start to make arguments to the contrary. That technology and in particular social network and video sites can be a hindrance to productivity in the workplace.

Further arguments can be made that the MSFT YHOO potential merger is further evidence that the technology industry is maturing.

It is what it is.

The Internet Is still Dead and Boring

Aug 27th 2007 12:08AM

I obviously hit a nerve with my last post. My index for quality of post has evolved to the number of “you suck”, “broadcast.com sucks”, “You got lucky”, etc posts that are submitted but never confirmed. For this post it was off the charts. Good.

When people resort to personal comments. Its usually a good sign.

Among those I respect, there were a lot of great responses. Let me first say, my position on this has nothing to do with HDNet. I’ve not abandoned the net. In fact i have more than 100 RSS feeds and untold other sites Im involved with.

Ive been inundated with spam on Myspace. Used flicker. Used Digg for sourcing news and laughed at the unending ridiculousness of its posters. Used and posted to Youtube, Google Video, DailyMotion, Veoh, Flickr, Slideshare, used every bittorrent client, got bored with twitter after 7 minutes, signed up for other findme, find you, this is where I am, this is where you are, type app I could find, and the lists go on and on. I read techmeme, techcrunch, extremetech, and tons of other tech sites and I make a point to try every and any new site that seems the least bit plausible or interesting. I spend far far too much time on the net just to make sure I keep up and know whats going on.

Honestly, its just a bigger, more time consuming version on CompuServe Forums from back in the day (Find someone who participated in the OS/2 forums if you want to know about social networks). Only back then you didn’t call People friends, they were just forum members.

I have a ton of Internet investments that you dont and wont know about.

i have loaded and used facebook apps and I have downloaded the API documentation and actually read it. I’m such an exciting guy, I downloaded Ruby on Rails and read the documentation as well. That’s what Saturday Nights are for.

I have bought installed and integrated every imaginable wireless device in my house. I think its fun.

I have invested in and gotten involved with application development on Facebook. Had a serious discussion with Facebook about the revenue opportunities they could achieve if they would license their API for full scale commercial applications on other websites. For example, to me, it would be an interesting and potentially explosive business move for Yahoo to license the Facebook API for their Panama platform. I think the beauty of Facebook is that people for the first time have defined and opened up the “database of their lives”. Which if integrated into an advertising platform like Panama would allow advertisers to truly personalize ads, rather than algorithmically present ads. To me it was an interesting conversation.

I think it could change the way advertising is handled on the net. Each user could have the option to publish certain fields/objects which could be replicated/peered to the licensees of the API and then integrated Into the ad serving application. When the user showed up on the licensee site, say Yahoo Finance, the ad server could present a contextual ad chosen based on the published objects within the context of the Yahoo content.

Its one of many good or bad ideas that are feasible because the net is the plain vanilla boring, never really changing platform that it is.

Guess what. When things go from exciting to stable and boring in the technology world, that’s a good thing.

Call me a cynic. I feel the same way about Personal Computers. Faster processors dint do it for me. Installing Vista was a disaster till I read a copy of CPU magazine and used the OS mods they had in there to clean the junk up. Its sad but true that a 25 year old platform is more volatile than the Internet. It still takes so long to boot that for the first time since I had a Mac in 1990 I bought a Macbook and junked my Vista Laptop. My time is at a premium. The days of being concerned that if I bought a Mac there might be some apps that I could use but the wouldn’t run on the Mac are long gone. Not because the Mac has an Intel processor, but because I cant really think of any new off the shelf software that I would get excited to buy.

Beyond Office and email, I spend a ton of time on the net. That boring platform that ain’t gonna change and is dead in the excitement category.

What do I get excited about ?
I’m excited about Virtual Machines, as I have written before, and the changes and impact they could have on all of us. I get fired up about the continuing decline in flash and hard drive prices. Its amazing to me after all these years of watching drive prices fall that I can buy more than 500gigs of drive for under 100 bucks. That i can buy a 16gig flash drive for not much more. and it still pisses me off that i have to deal with file size limits that require me to manage my email files when I back them up.

And of course I’m excited about the HDTV space and whats happening there. Maybe some people dont think peoples media consumption patterns change when 70″ HDTVs are installed in their homes, I do.

Which brings me to why I said that “The Net is Dead and Boring”

The best way to sum up how I feel about the excitement and opportunities on the net compared to the many other personal and corporate technology options out there is to use a Yogi Berra quote.

“Nobody goes there anymore. It’s too crowded”

When everyone is looking for gold in the same river, the best opportunities are somewhere else.

But hey, that’s just me.

The Internet is Dead and Boring

Aug 24th 2007 5:53PM

A lot of people are all up and upset about my comments that the Internet is dead and boring. Well guess what, it is. Every new technological, mechanical or intellectual breakthrough has its day, days, months and years. But they don’t rule forever. That’s the reality.

Every generation has its defining breakthrough. Cars, TV, Radio, Planes,highways, the wheel, the printing press, the list goes on forever. I’m sure in each generation to whom the invention was a breakthrough it may have been heretical to consider those inventions “dead and boring”. The reality is that at some point they stop changing. They stop evolving. They become utilities or utilitarian and are taken for granted.

Some of you may not want to admit it, but that’s exactly what the net has become. A utility. It has stopped evolving. Your Internet experience today is not much different than it was 5 years ago.

That’s not to say the impact of the Internet on the entire planet hasn’t been off the charts. It has been. It has changed the lives of billions of people and it will continue to be a utility to billions of people. Just like cars, TVs, Radio, Planes, Highways, you get the point.

Some people have tried to make the point that Web 2.0 is proof that the Internet is evolving. Actually it is the exact opposite. Web 2.0 is proof that the Internet has stopped evolving and stabilized as a platform. Its very very difficult to develop applications on a platform that is ever changing. Things stop working in that environment. Internet 1.0 wasn’t the most stable development environment. To days Internet is stable specifically because its now boring.(easy to avoid browser and script differences excluded)

Applications like Myspace, Facebook, Youtube, etc were able to explode in popularity because they worked. No one had to worry about their ISP making a change and things not working. The days of walled gardens like AOL, Prodigy and others were gone. The days of always on connections were not only upon us, but in sufficient numbers at home, work and school, that the applications ran fast enough to hold our interest and compel us to participate. In other words, the Internet stabilized. Great software was developed to run on the software.

Just as a reminder to some, Myspace, Facebook, Youtube, etc are not “the Internet”. They are software applications that run on the Internet. Just like MicroSoft Excel is a software application that runs on MicroSoft and Apple operating systems.

The days of the Internet creating explosively exciting ideas are dead. They are dead until bandwidth throughput to the home reaches far higher numbers than the vast majority of broadband users get today.

Few people’s actual throughput to their homes have increased more than 5mbs in the past 5 years, and few people’s throughput (if you dint understand the difference between throughput and the marketed downstream speeds your read from your ISP, you should) to their homes will increase more than 10mbs in the next 5 years. That’s not enough to define a platform that allows really smart people to come up with groundbreaking ideas.

In fact, if you index the expected growth in bandwidth consumption by applications that are heavy LAST MILE bandwidth users (as opposed to the Internet backbone where there is plenty of bandwidth but consumers cant get to it) vs the actual increase in LAST MILE bandwidth available to the home, our net effective throughput to the home could decline over the next few years. The Internet is like a highway. There is plenty of room for everyone to go as fast as the throughput will let you go, that is until the traffic forces everyone to slow down.

For some reason a lot of people don’t understand that concept.

So, let me repeat, The days of the Internet creating explosively exciting ideas are dead for the foreseeable future..

The Internet is boring. That is not a bad thing. In fact its easy to make the argument that its a great thing. That it has become the utility that the people who worked to get it started firmly believed it would. That it finally is the platform for any number of mundane applications that are easy to write and that anyone can use and trust.

Just like wheels, printing presses, cars, TV, radio, electricity, water…..

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