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The Year the Net Ate TV

Both Hulu and Netflix posted impressive gains in the third quarter. Hulu earned $240 million in revenue in 2010, according to Mashable.  After just three years of operation, the internet-TV service now claims 30 million users and 253 content partners.

“In the third quarter, Netflix saw a 52 percent gain in subscribers to 16.9 million. Revenue increased 31 percent to $553 million,” the Washington Post reported. Most of the gains are in video streaming; in the fourth quarter Netflix expects to deliver more movies via the net than through the postal service.

Add this to the recent news that YouTube users are now uploading 35 hours of video every minute, and it’s not hard to predict that 2011 will be the year that the internet swallowed television. From a user’s perspective, this is great news. For the cost of a broadband connection and a Netflix subscription, couch potatoes everywhere can select what they want to watch from an expanding universe of movies, TV and homemade video. Cable companies and telecom ISP providers are less than thrilled by this trend. They have been busy lobbying the FCC to carve out a space for “specialized services” on the net.

This bid for an exception to the principles of network neutrality is just the latest bit of Orwellian obfuscation from the telecom lobby. Sadly,  it appears to be gaining traction with the Federal Communications Commission, if this muddled ArsTechnica piece is to be believed.

Netflix management was not deceived. In a recent statement to the FCC they wrote:

Netflix continues to believe that the risks posed by specialized services being provided over the same physical network as the public Internet heightens the need for oversight of such services. The Commission must assure that specialized services do not, in effect, transform the public Internet into a private network in which access is not open but is controlled by the network operator, and innovative Internet-based enterprises are permitted effective access to their consumers only if the enterprises pay network operators unreasonable fees or are otherwise seen by such network operators as not threatening a competitive venture.

Netflix and Hulu are just two examples of new companies that would not exist without a free and open network. Tens of thousands of other companies depend upon an open network to do business. What’s it going to take to get Congress and the FCC to codify the principles of network neutrality in law and enforce them with an administrative rule?

The Master Switch

In 1994, when I was  introduced to the WWW portion of the internet, my first question was, “Who owns it?”

“Everybody does,” was the answer at the time.  For the first two decades of the web’s existence, that was true. Now that may be changing.

Columbia Law School professor Tim Wu’s new book, The Master Switch: The Rise and Fall of Information Empires looks at the cycle of creation-chaos-and-control in communication systems.  ”Information technologies give rise to industries, and industries to empires.” Wu said.  This cycle ultimately destroys the innovative spirit that creates new information technologies and the openness that typifies them in their early years. This pattern appears to be replicating itself with the internet, Professor Wu said in a recent NPR interview. For more detail, see The New Yorker for a series of video interviews with Tim Wu and Jefferey Toobin.

Wu has also been an advocate of network neutrality, the principle that all information carried on a given network is treated the same. For more of Professor Wu’s writing on this topic, see the Network Neutrality FAQ.

The issues of network neutrality and big capital trying to control information systems are not unrelated. Like the collusion of Western Union and the Associated Press 150 years ago, several players have been trying to consolidate content and its distribution over the net into one system.

A pair of articles, in the September issue of Wired ( “The Web is Dead” ),  by Chris Anderson and Michael Wolff, persuasively makes the case for an emerging class of applications and proprietary software supplanting HTML in the next few years. As the authors write, the devices and software used on the net will shift from open (HTML, XML, etc.) to closed systems (apps, iTunes, video codecs).

“Indeed, there has hardly ever been a fortune created without a monopoly of some sort, or at least an oligopoly. This is the natural path of industrialization: invention, propagation, adoption, control, ” Anderson writes in his piece. Oddly, Tim Wu is never mentioned in the article.

Traffic in the WWW portion of the net has seen a consolidation with the big players. As Wolff write in his Wired article:

“the top 10 Web sites accounted for 31 percent of US pageviews in 2001, 40 percent in 2006, and about 75 percent in 2010. “Big sucks the traffic out of small,” Milner says. “In theory you can have a few very successful individuals controlling hundreds of millions of people. You can become big fast, and that favors the domination of strong people.”

That may be result of Google’s indexing of the web, which favors already popular sites, or a natural laziness on the part of readers who just want to get their info in a coherent package and move on to the next thing.

Both Anderson and Wolff cite the failure of internet advertising as a major force behind the move to closed systems and subscription services.  But they overlook the importance of open repositories — Wikipedia content, KML annotations, Yelp reviews, Twitter feeds — in supplying the information that makes apps worthwhile. Oligarchs may be moving the web toward closed systems, but they still need the rabble to provide the bulk of content.

Certainly the internet is evolving.  The web itself — the information wrapped in HTML and related languages — is a declining portion of all traffic online. Video content now accounts for 26 percent of traffic online, according to an October 25 usage study by Cisco, while P2P file sharing claims 25 percent of IP traffic and HTTP (primarily web pages cast in HTML) retains 26 percent.  In June, a Cisco study predicted that by 2014, 91 percent of all consumer traffic on the net will be video. The same report forecast a four-fold increase in internet traffic:  ”In 2014, the Internet will be four times larger than it was in 2009. By year-end 2014, the equivalent of 12 billion DVDs will cross the Internet each month.”  The “Internet” is the now-40-year-old set of standards  (notably Transmission Control Protocol and Internet Protocol, or TCP/IP) that facilitates the transmission of all data types on the net.

All of these tools are transitory. The hardware and software we use now will seem quaintly absurd in a decade or so, but the idea of a global network open to everyone is concept that capital alone cannot kill.

How to Be Digital

Douglas Rushkoff’s new book, Program or Be Programmed, makes a good argument for agency in the digital age.  The 140-page book elaborates on 10 Commands:

1. TIME: Do Not Be Always On
2. PLACE: Live in Person
3. CHOICE: You May Always Choose None of the Above
4. COMPLEXITY: You Are Never Completely Right
5. SCALE: One Size Does Not Fit All
6. IDENTITY: Be Yourself
7. SOCIAL: Do Not Sell Your Friends
8. FACT: Tell the Truth
9. OPENNESS: Share, Don’t Steal
10. PURPOSE: Program or Be Programmed

A more in-depth discussion of the book is on NPR’s On Point.  The repository of this popular NYU prof’s writings can be found on his website, Rushkoff.com.

In a similar vein,  author Nicholas Carr examines the effect of extensive internet use on our cognitive processes. His most-recent book, The Shallows: What the Internet is Doing to Our Brains, is excerpted in the June issue of Wired. The upshot: the net promotes skimming and multi-tasking at the expense of concentrated linear thinking.

Malcolm Gladwell tackled the limited utility of social networks in his recent New Yorker article, “Small Change, Why the Revolution Will Not Be Tweeted.” Gladwell uses examples from the American Civil Rights movement to show why “strong ties” are a necessary component of real social change. He contrasts this with the “weak ties” engendered by social media:

The platforms of social media are built around weak ties. Twitter is a way of following (or being followed by) people you may never have met. Facebook is a tool for efficiently managing your acquaintances, for keeping up with the people you would not otherwise be able to stay in touch with. That’s why you can have a thousand “friends” on Facebook, as you never could in real life.

Gladwell has identified the particular weakness of click-here activism and a trend in networked communication.  As Gladwell writes in his conclusion: “The instruments of social media are well suited to making the existing social order more efficient. They are not a natural enemy of the status quo.”

It doesn’t take a pundit to posit a shift in the zeitgeist regarding the web. Now that the network is ubiquitous, now that the internet accounts for such a large portion of our daily diet of information, we really do have to watch what we eat.  Critical thinking and personal agency is part of the equation. An awareness of how the medium can skew the message  (and maybe our synapses) also helps. The limits of internet activism also must be acknowledged, along with an understanding of the web’s place in the broader economic context. But more on that later.

Right now I have to do some yard work.

Data and the City

New York has been called ungovernable. No one would dispute that the city is difficult to manage,  but it is not ungovernable.

Take the issue of transportation, for example. New York’s metropolitan region of 20 million people is served by 20 rail lines moving about 150 million riders each year. The regional rail network converges on two stations in Manhattan — Penn and Grand Central. Add to that daily subway, car, bus and bike trips into Manhattan and you’ve got a situation that has spawned a lot of neologisms, the politest of which is probably “gridlock”. Moving millions of people in and out of Manhattan each day is a big problem to be sure, but not impossible. The problem has to be broken up into smaller pieces first and then quantified.

Charlie Komanoff  is trying to do just that. Komanoff is a transportation and energy consultant who is adding up the costs of travel into and out of New York City. He has come close to achieving that goal with the Balanced Transportation Analyzer, a massive 4.5 MB spreadsheet that will allow city planners to model the cost-time impacts of various transportation policies. The most telling finding of this three-year study is the high cost of motor vehicle traffic in New York. Komanoff figures that each car admitted to Manhattan’s central business district (the area from 60th st. to the Battery) during the morning rush generates 3.66 hours of associated delays, or about $145 worth of our time.

Komanoff is the subject of a fascinating article in the June issue of Wired, by Felix Salmon. He is also the organizing force behind Transportation Alternatives, an influential bicycle and pedestrian advocacy group based in New York.

Gadget Fetish

Couldn’t resist this fuzzy clip from 1981 where ur-techno musicians Kraftwerk demonstrate man-machine love.