The Internet: Everything Has A Price

A new book about an old problem:  Has the internet become an “artistic wasteland” where content has been devalued by distributors who get a free ride?  In my opinion, the answer is a resounding “yes!”

The book, Free Ride, by Robert Levine, is worth singling out, because it addresses how the culture business can fight back.  While I have not yet read the book, I am highlighting and commenting on the review I read in the Sunday Book Review section of The New York Times, simply to give Levine’s strategy a further airing, as we all consider a solution to this problem. 

The issue, Levine says, is “between the media companies that fund much of the entertainment that we read, see and hear and the technology firms” who want to distribute the content, legally or otherwise.  The free-riding distributors “reap all the economic benefits of the Internet by cutting prices and the culture suppliers are forced to cut costs in response.”

The crux of the problem is copyright laws which are poorly crafted and hard to enforce, allowing this situation to develop.  Further, the review points out, copyright protections have become illusory in an age when movies and music are available on pirate sites even before they are released.  Thus media companies have little leverage when negotiating with distributors, whom Levine refers to as “digital parasites.”  A startling example is that despite the growth of online audiences, recorded music in the U.S. was worth $6.3 billion in sales in ’09, less than half its value a decade earlier, the review notes. 

Levine’s solution is the European model, which has a long history of supporting its culture business and taking a strong stand against piracy.  Primarily, it is likely that its copyright laws are enforceable.  Rather than filing mass lawsuits against individuals who upload pirated material, the review suggests, European regulators bring down the most flagrant violators among distributors.  Levine also cites France for its blanket license which adds fees to internet connections, enabling a division of the money collected between the distributors and the artists. 

Levine concludes that while the status quo may benefit consumers in the short term, the internet will eventually become dominated by cultural amateurs — a “world where music, TV, and journalism are virtually free, and where all of us get what we pay for.”

Penn State Turnaround

On November 9, Penn State head football coach Joe Paterno announced his retirement, effective at the end of the season, and added an eloquent apology to the children and families devastated by the repeated instances of child sexual assault allegedly committed by former Penn State assistant coach Jerry Sandusky. In his statement, Paterno said: “I am absolutely devastated by the developments in this case. I grieve for the children and their families, and I pray for their comfort and relief. … With the benefit of hindsight, I wish I had done more.”

It was a case of much too little, way too late. Within a few hours, Paterno and Penn State president Graham Spanier were summarily fired by the school’s board of trustees.

Last Thursday, in my blog, I wrote that “there are there are actions that can be taken to begin turning the situation around.”

So, what actions should Penn State take that would signal the beginnings of a turnaround?

• First and foremost, the school should audit the students, professional staff and other employees to ensure that there are no other looming issues which could explode on the heels of these sex crimes. And they should be prepared to publish the results.


• Next, Rod Erickson, the new president of the university, should publicly apologize to the students, faculty, other staff, parents, the community, the athletic teams and all other stakeholders for the mistakes the university made in this debacle. The apology should be publicized nationally via its website and student, alumni and news media, both social and traditional. And it should be more than “I’m sorry.” Erikson made a start, last Monday, on the Penn State website, but, in my opinion, fell short in terms of detailing the practical ways in which the university plans to make amends to the people who have been hurt by its previous mistakes.


• Thirdly, make ethics (or “Honor”) courses mandatory for students, faculty, coaches and any other university personnel whose poor choices could compromise gains made by the university from here on in. The throngs of student rioters have their values and mores misplaced. Hopefully, this kind of training can set them right.


• There are another 100,000 victims of the scandal: the children served by The Second Mile, the Pennsylvania nonprofit founded by Sandusky and from whose ranks he apparently selected his victims. Its president has resigned and the charity, which is currently under investigation by the Pennsylvania Attorney General's office, may not survive. In my opinion, Penn State should identify charities with impeccable credentials (e.g., the Boys & Girls Clubs of America, Big Brothers Big Sisters of America, Children's Defense Fund and KaBOOM!) and support one or more of them with funding and volunteers.

Thoughtful action is essential to heal the wounds and restore Penn State’s reputation.

Penn State: Whose Fault Is It?

National advertisers are pulling out of Penn State.

While this is not surprising to those of us in the business of reputation management, some may wonder why leading brands want to avoid the link with Penn State, as an institution, when it appears that the horrible sex crimes were committed by one person there.

Well, in my opinion, there are two primary reasons for the mass exodus of Penn State’s national corporate sponsors: 1) the nature of the transgression and 2) the university’s reaction to it.

The alleged crimes – which involve the ongoing sexual assault of children were compounded by the fact that reports of the abuse (by the children themselves, their parents and Penn State employees) were repeatedly ignored and covered up by the university, according to the Grand Jury Report, making it a university issue.

When action was finally taken, which included firing Joe Paterno, the legendary football coach, and cutting ties with Jerry Sandusky, the alleged pedophile, Penn State students responded by rioting. If you are a major corporation looking to enhance your brand equity, these are not the sort of people you want as your brand ambassadors.

As I noted in my recent interview with the Philadelphia Inquirer, Penn State will likely be a risky investment for potential advertisers for some time to come, as the story’s not over and litigation will probably keep it alive in the near term. It is an unfortunate situation for a university whose motto is “Success with Honor.” However, there are actions that can be taken to begin turning the situation around. The question is whether and when the university will begin to act.

High-Performing Women in High Tech

“I’d never want a woman for a boss!” “Women are too competitive with each other!”

Unfortunately, these are old workplace stereotypes that I’d hoped had finally been laid to rest. Nevertheless, they were cited in a panel of female technology and internet entrepreneurs at Makovsky + Company on November 9 as among the images that today’s women have grown up with that have held many back. Still -- a glowing story was told in the outstanding track record that entrepreneurial women in technology and the internet have already achieved.

Makovsky sponsored the program, “Do Women Dominate the Web?” for Women 2.0, whose mission is to inform, inspire and educate a new generation of females that are entrepreneurial, innovative and successful. The panel was led by noted CNBC reporter Seema Mody. About 60 Women 2.0 members and guests attended.

“My generation of women knew they could be lawyers and doctors,” one panelist said, “but they did not even think about the possibility of starting a business.”

But things have been changing. One of the panelists pointed to a recent survey by Illuminate Ventures, an early stage venture capital firm based in San Francisco, which studied high-tech female entrepreneurs over the past decade, and concluded that women are on the cusp of becoming a leading entrepreneurial force in technology. Among the findings:

• Organizations which are the most inclusive of women in top management achieve 35% higher ROE and 34% better total return to shareholders versus their peers.

• High-tech companies built by women are more capital efficient than the norm, with the average company achieving early year revenues using one-third less capital.

• Women-owned businesses are more likely than the average to survive the transition from raw start up to established company.

• Women-owned or -led tech firms are the fastest growing sector of new venture creation in the U.S.

• In the past 10 years more than 125 companies with over 200 women co-founders or officers have achieved IPOs of >$50 million M+A exits in the U.S. high-tech sector.

“We need more and more role models that are written up and talked about,” one of the panelists said. “We need to learn from each other and be mentors to others. My daughter feels she can be anything and do anything – even start a company! What a change!”

Woot! OED Adds New Tech Words

Just a few months ago, the venerable Oxford English Dictionary (OED, to you logophiles) added a number of new entries to its lexicon. You may be familiar with some of them:

Retweet: verb: (on a social networking service, such as Twitter) to repost or forward (a message posted by another user)

Sexting: noun: the sending of sexually explicit photographs or messages via mobile phone

Cyberbullying: noun: the use of electronic communication to bully a person, typically sending messages of an intimidating or threatening nature

Woot: exclamation: (especially in electronic communication) used to express elation, enthusiasm or triumph

Textspeak: noun: language regarded as characteristic of text messages, consisting of abbreviations, acronyms, initials, emoticons, etc.

Link, via Neatorama.

Nobel: How He Built His Reputation

At one time or another, most people wonder how they will be remembered. Alfred Nobel, the inventor of dynamite, was one of the few individuals who actually discovered what the world would think of him at his death. (This was 115 years ago … before you could Google yourself.) And it turned his life — and reputation — around.

In 1888, Alfred's brother Ludvig died while visiting France, and a French newspaper erroneously published Alfred's obituary. The paper reported, "Dr. Alfred Nobel, who became rich by finding ways to kill more people faster than ever before, died yesterday." It condemned him for his invention of dynamite, saying, “Le marchand de la mort est mort.” ("The merchant of death is dead.")

Alfred was concerned about how he’d be remembered and deeply disappointed with what he read. So, on November 27, 1895, at the Swedish-Norwegian Club in Paris, Nobel signed his last will and testament, setting aside the bulk of his massive estate (the equivalent of about US$250 million) to establish the Nobel Prizes, to be awarded annually to those “who during the preceding year shall have conferred the greatest benefit on mankind” in the areas of medicine, chemistry and physics, literature and peace. (Economics was added later.)

Large philanthropic gifts to science were rare in Nobel’s day. Moreover, establishing annual international prizes in any field was novel. Also, controversial, because some of the prizes were distributed outside of Sweden. He did it anyway.

Nobel’s attempt to salvage his reputation was ultimately a success … and a model for other men of great wealth who followed.

Ever Wonder Why So Many Computer Voices Are Female?

The new iPhone’s voice-activated feature called Siri is designed to answer questions in a part-human, part-robot voice that CNN reporter Brandon Griggs describes as “deep, briskly efficient and distinctly female. (At least in the U.S. and four other countries. In France and the UK, Siri is male.)” Interestingly, users refer to the Siri app as “she,” not “it.”


Why are so many computer voices female?

One reason is biology. Scientific studies have shown that people generally find women's voices more pleasing than men's.

Another reason is history. According to some sources, the use of female voices in navigation devices dates back to World War II, when women's voices were employed in airplane cockpits because they stood out among the male pilots.

The third reason is “typecasting.” Telephone operators have accustomed people to accepting help from a disembodied female voice.

Says CNN’s Griggs, “Voices of authority or menace tend to be male: the homicidal HAL 9000 computer in ‘2001: A Space Odyssey,’ the computer program in ‘WarGames,’ or Auto, the spaceship's autopilot function in ‘Wall-E.’ More subservient talking machines, such as the onboard computer from the ‘Star Trek’ TV series, skew female.”

Who knew?