In a matter of months, this online phenomenon went from zero users to millions. It was hugely popular with media-loving teens and young adults, whose participation drew in even more people. And for many, it became a daily obsession.
In 1999, the phenomenon was called Napster, a service that allowed users to swap songs through the Internet. Two years later, a pair of competing file-sharing networks -- Morpheus and Kazaa -- enjoyed a similarly meteoric rise. In 2005, a new version arrived -- this time in the form of the social-networking site MySpace (and, in a more modest way, Facebook), which allowed people to post profiles to the Web and communicate with friends through them. This year's model is the video-sharing site YouTube. As of October, MySpace had almost 50 million users, according to Nielsen//NetRatings, making it the runaway king of social networks. YouTube, meanwhile, had 30 million users, making it the most popular user-generated video site.
The two companies differ in fundamental ways from their file- sharing predecessors, but their popularity flows in part from the same source: a supply of free media contributed by users. On YouTube, it is video clips; on MySpace, it is clips (often provided through links to YouTube) and music. In fact, the two sites each show more videos than any Web site except Yahoo, according to a recent study by comScore Media Metrix, which tracks online activity.
And now, with both sites drawing flak from copyright holders, the question is whether they'll follow their predecessors' rapid path downward too. The descent of the file-sharing companies was fueled mainly by their inability to satisfy the demand for free downloads that they had stoked. When the courts ordered the original Napster to prevent users from downloading copyrighted songs, for instance, it lost more than 60 percent of its audience in five months, according to comScore Media Metrix. It never recovered.
MySpace and YouTube are in a different position legally and economically. They're Web sites, not software programs designed to copy digital files (so the companies can argue that they are protected from liability by special rules for Internet providers.) And their owners -- News Corp. and Google, respectively -- have very deep pockets and can afford to fight any challenges.
Still, the communities they have created rely to a great extent on users' ability to express themselves through media, and frequently the copyrights to that media are owned by a major music company, TV network or studio. While arguing that they aren't liable for their users' infringements, the companies also have tried to placate copyright owners by striking deals to share revenue with them (e.g., YouTube's deals with Warner Music Group and Universal Music Group) or sell their content (e.g., MySpace's deal with Snocap to help sell songs from unsigned artists). But the major labels and studios have not been mollified and have continued to press the companies to block copyrighted works from being posted on their sites unless specifically authorized. YouTube is developing technology to do just that.
Depending on how restrictive copyright owners decide to be, MySpace and YouTube could face a Hobson's choice. If they accede to the demands of Hollywood and the record labels and allow only a fraction of their works to be posted, users might be driven away because they can't express themselves the way they want to. And as their audiences thin, so will the glue that binds many users. It's the "network effect" in reverse: As users leave, the sites' breadth diminishes, prompting more people to go elsewhere.
Alternatively, MySpace and YouTube could refuse and continue letting users post whatever songs or clips they please, removing material only if the copyright holder complains. Some copyright specialists argue that MySpace and YouTube are shielded by the 1998 Digital Millennium Copyright Act, which exempts Internet service providers from liability as long as they remove infringing material when asked. But other experts disagree, saying the exemption doesn't apply to MySpace and YouTube. Universal Music Group, among others, doesn't believe it does; it sued MySpace and News Corp. for copyright infringement Nov. 17.
It's ironic to see News Corp., whose 20th Century Fox movie studio helped bring the lawsuits against Kazaa, Morpheus and numerous individual file-sharers, on the defensive. At the same time, it's refreshing to see an important copyright-law case litigated by parties with comparable resources on both sides, rather than having the entertainment industry pound away at much smaller figures.
The best result would be for Universal and its entertainment brethren to work out a way with MySpace and YouTube to turn people's enthusiasm for posting songs and clips into a robust revenue stream - - assuming that the sites can gin up enough money to make everybody happy. In another parallel with the original Napster, MySpace and YouTube haven't found a way yet to generate much revenue from advertisers or users. And the longer that remains true, the greater the chance that the companies will meet the same fate.
by
John Healey is an editorial writer for the Los Angeles Times
Showing posts with label MySpace. Show all posts
Showing posts with label MySpace. Show all posts
Thursday, November 1, 2007
Wednesday, October 31, 2007
Murdoch, a Folk Hero in Silicon Eyes on Future of Media
At the Web 2.0 Summit a few weeks ago, MySpace held an after-party at the San Francisco Museum of Modern Art. With a guest list of Silicon Valley luminaries and a party room redone in white — carpet, chairs, table and yes, mostly people — it was a very post-modern indication that MySpace, the social network owned by the News Corporation, was ready to engage with its brethren to the north by opening an office here.
Half an hour into the party, there was a ripple of excitement, and people started murmuring and pointing toward the door. When the crowd parted, I expected to see Mark Zuckerberg, the young overlord of Facebook, or Steve Ballmer, the battle-hardened Microsoft veteran. Then again, this is a MySpace party, so maybe Britney Spears or Lindsay Lohan? Instead, it was Rupert Murdoch — old school, old media, and at 76, just plain old.
From the reaction of the crowd, it might as well have been Lindsay Lohan. He was overwhelmed by an immediate onrush of hospitality as the geekerati lined up to get a word with him.
Back East, the elites generally regard Mr. Murdoch, most especially with his purchase of The Wall Street Journal, as if a particularly unpleasant coup was under way. He is treated much the way he is in London (where he has owned The Times for more than 20 years), as an immigrant, a man of suspect values and provenance, even though he runs a $70 billion diversified media company.
In the United States, Mr. Murdoch’s appeal is thought to work in the heartland, where Fox News takes aim. But on the left coast, Mr. Murdoch is truly among friends. The attendees at the Web 2.0 conference know him as the ultimate market timer, the guy who swooped in out of nowhere and bought MySpace for $580 million two years ago, before its audience doubled and before social networks became the platform of the future. And this was before Facebook got a valuation of $15 billion via an investment from Microsoft on Wednesday.
“This is not just another rich guy — there are a lot of those around here,” said John Battelle, one of the summit’s hosts. “He built News Corp. from not much, with his own two hands, and this is a room full of entrepreneurs. The other thing this room respects is intelligence, and they can tell he is smart, really smart, not just from what he says, but what he has done with MySpace.”
The same characteristics that make Mr. Murdoch a nonmember of the club in the East — a lack of correctness and, occasionally, business civility — make him something of a folk hero in the context of the new economy, which is peopled by insurgents who see him as a fellow pirate, even though he already captains a giant ship.
In a joint interview on the stage of the summit with Chris DeWolfe, a MySpace founder, earlier that night, Mr. Murdoch brandished both humility and hubris. He said that the folks at News Corporation were “trainees” when it came to new media but added elsewhere that CNBC was “half dead,” that MySpace was probably worth 30 times what he had paid for it, and he all but licked his lips when he responded to a question about whether he would like to use The Wall Street Journal to “kill” The New York Times.
“That would be nice,” he said.
At a conference where most chief executives proceeded with euphemistic elegance — Mr. Ballmer stonewalled questions about negotiating for a piece of Facebook even as the deal was being consummated and gave a long answer to a question about Google without mentioning its name — Mr. Murdoch answered almost every question put to him, often naming names and frankly laying out his ambitions. He was a hit in the room and the belle of the ball afterward.
And in a move that plays like raw meat in this lion’s cage of developers, Mr. DeWolfe and Mr. Murdoch said MySpace would open the platform to applications or so-called widgets from outside programmers, a decision Facebook made in the spring.
“He is candid and he is aggressive,” said Jason Calacanis, who sold his start-up, Weblogs, to AOL for a reported $25 million two years ago. “He said during the discussion that he basically wanted to crush The New York Times and crush CNBC. When do you hear somebody in that kind of position being so candid?”
It’s not just Mr. Murdoch’s aggression the audience responds to. In a speech to the American Society of Newspaper Editors in 2005, Mr. Murdoch suggested that newspapers were “immigrants” to the digital space who needed to learn from “natives.”
He seems to have gotten the hang of things pretty quickly, telling the Web 2.0 crowd, “No one delivers huge audiences anymore.” One of the conference’s themes was that advertisers, who will finance things as diverse as cellphones and desktop applications, are no longer after just eyeballs, but consumer behavior, too.
For a so-called old media company, News Corporation has done significant work to move from taking orders for mass inventory to offering focused buys with specific audience characteristics. Mr. Murdoch recently bragged at a conference about being able to deliver, say, all the optometrists in the London area — which is very Web 2.0, as they say.
I waited my turn in the queue at the party, and Mr. DeWolfe, who had just signed a deal for two more years with News Corporation, made an introduction. Amid the throbbing house music, Mr. Murdoch and I chatted briefly about his purchase of The Wall Street Journal, which will be completed in December.
Perhaps in an effort to keep cognitive dissonance at bay, the journalists I know at The Journal have changed posture from doomsaying to a growing curiosity about what it will be like to work for someone who actually wants to invest in newspapers. I mentioned as much to Mr. Murdoch. “That is the sense I am getting,” he said.
I also joked that he might have to cut a lot of checks to compete with my employer for national and international news, adding that this has been a tough business of late. But he insisted there was “plenty of room for growth” in the newspapers.
“We can’t wait to get started,” he said.
Others can’t wait either. “Who isn’t interested in seeing some other newspaper people who want to fight and do bold things?” Mr. Calacanis observed. “Murdoch is someone who is actually investing in newspapers. Even you have to be rooting for that.”
Source :nytimes.com
Half an hour into the party, there was a ripple of excitement, and people started murmuring and pointing toward the door. When the crowd parted, I expected to see Mark Zuckerberg, the young overlord of Facebook, or Steve Ballmer, the battle-hardened Microsoft veteran. Then again, this is a MySpace party, so maybe Britney Spears or Lindsay Lohan? Instead, it was Rupert Murdoch — old school, old media, and at 76, just plain old.
From the reaction of the crowd, it might as well have been Lindsay Lohan. He was overwhelmed by an immediate onrush of hospitality as the geekerati lined up to get a word with him.
Back East, the elites generally regard Mr. Murdoch, most especially with his purchase of The Wall Street Journal, as if a particularly unpleasant coup was under way. He is treated much the way he is in London (where he has owned The Times for more than 20 years), as an immigrant, a man of suspect values and provenance, even though he runs a $70 billion diversified media company.
In the United States, Mr. Murdoch’s appeal is thought to work in the heartland, where Fox News takes aim. But on the left coast, Mr. Murdoch is truly among friends. The attendees at the Web 2.0 conference know him as the ultimate market timer, the guy who swooped in out of nowhere and bought MySpace for $580 million two years ago, before its audience doubled and before social networks became the platform of the future. And this was before Facebook got a valuation of $15 billion via an investment from Microsoft on Wednesday.
“This is not just another rich guy — there are a lot of those around here,” said John Battelle, one of the summit’s hosts. “He built News Corp. from not much, with his own two hands, and this is a room full of entrepreneurs. The other thing this room respects is intelligence, and they can tell he is smart, really smart, not just from what he says, but what he has done with MySpace.”
The same characteristics that make Mr. Murdoch a nonmember of the club in the East — a lack of correctness and, occasionally, business civility — make him something of a folk hero in the context of the new economy, which is peopled by insurgents who see him as a fellow pirate, even though he already captains a giant ship.
In a joint interview on the stage of the summit with Chris DeWolfe, a MySpace founder, earlier that night, Mr. Murdoch brandished both humility and hubris. He said that the folks at News Corporation were “trainees” when it came to new media but added elsewhere that CNBC was “half dead,” that MySpace was probably worth 30 times what he had paid for it, and he all but licked his lips when he responded to a question about whether he would like to use The Wall Street Journal to “kill” The New York Times.
“That would be nice,” he said.
At a conference where most chief executives proceeded with euphemistic elegance — Mr. Ballmer stonewalled questions about negotiating for a piece of Facebook even as the deal was being consummated and gave a long answer to a question about Google without mentioning its name — Mr. Murdoch answered almost every question put to him, often naming names and frankly laying out his ambitions. He was a hit in the room and the belle of the ball afterward.
And in a move that plays like raw meat in this lion’s cage of developers, Mr. DeWolfe and Mr. Murdoch said MySpace would open the platform to applications or so-called widgets from outside programmers, a decision Facebook made in the spring.
“He is candid and he is aggressive,” said Jason Calacanis, who sold his start-up, Weblogs, to AOL for a reported $25 million two years ago. “He said during the discussion that he basically wanted to crush The New York Times and crush CNBC. When do you hear somebody in that kind of position being so candid?”
It’s not just Mr. Murdoch’s aggression the audience responds to. In a speech to the American Society of Newspaper Editors in 2005, Mr. Murdoch suggested that newspapers were “immigrants” to the digital space who needed to learn from “natives.”
He seems to have gotten the hang of things pretty quickly, telling the Web 2.0 crowd, “No one delivers huge audiences anymore.” One of the conference’s themes was that advertisers, who will finance things as diverse as cellphones and desktop applications, are no longer after just eyeballs, but consumer behavior, too.
For a so-called old media company, News Corporation has done significant work to move from taking orders for mass inventory to offering focused buys with specific audience characteristics. Mr. Murdoch recently bragged at a conference about being able to deliver, say, all the optometrists in the London area — which is very Web 2.0, as they say.
I waited my turn in the queue at the party, and Mr. DeWolfe, who had just signed a deal for two more years with News Corporation, made an introduction. Amid the throbbing house music, Mr. Murdoch and I chatted briefly about his purchase of The Wall Street Journal, which will be completed in December.
Perhaps in an effort to keep cognitive dissonance at bay, the journalists I know at The Journal have changed posture from doomsaying to a growing curiosity about what it will be like to work for someone who actually wants to invest in newspapers. I mentioned as much to Mr. Murdoch. “That is the sense I am getting,” he said.
I also joked that he might have to cut a lot of checks to compete with my employer for national and international news, adding that this has been a tough business of late. But he insisted there was “plenty of room for growth” in the newspapers.
“We can’t wait to get started,” he said.
Others can’t wait either. “Who isn’t interested in seeing some other newspaper people who want to fight and do bold things?” Mr. Calacanis observed. “Murdoch is someone who is actually investing in newspapers. Even you have to be rooting for that.”
Source :nytimes.com
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